National Bank of Canada's (NBC) Taylor Schleich and Vy Le note that United States (US) growth expectations remain healthy, with GDP projected to expand above 2% in 2026, but they see a less benign inflation outlook. While headline inflation may approach 2% by mid-2027, core is described as stickier. They stress the Fed’s price-stability focus and a committee split leaning tighter, yet economists largely doubt rate hikes will occur in 2026.

Healthy growth but uncertain Fed path

"Meanwhile, the U.S. growth outlook remains stable and healthy, with the economy expected to expand more than 2%."

"The U.S. inflation outlook is not as benign."

"The headline gauge may reach (close to) 2% by mid-2027, but core appears stickier."

"That seems like it’d be a problem for this new-look, price stability-focused Fed where half the committee think tighter policy is needed."

"Only 10% of forecasters see the Fed hiking in 2026 and this more restrictive camp is still outnumbered by those calling for cuts."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)