Allspring Global Investments
US inflation will likely progress very slowly toward the Fed’s 2% target rate as the US economy stabilizes, but it’s unlikely to be a straight line to the target.
Apollo Global Management
We believe it will take longer than expected for the Fed to travel the last mile toward its inflation goal. We expect the Consumer Price Index and Core Personal Consumption Expenditure Price Index to come in at 2.4% and 2.3%, respectively, in 2025.
Apollo Global Management
If implemented, Trump’s key policy objectives — lower taxes, higher tariffs, and reduced immigration — could increase rates, boost asset prices, drive inflation, and strengthen the dollar.
Barclays Private Bank
Any tariffs-related inflation shock should be short-lived. Similarly, just as how companies and consumers adjusted after the “trade war” in Trump’s first administration, we would expect the US economy to “move on” within a few quarters, following the announcement of new tariffs.
Bel Air Investment Advisors
While the Federal Reserve has successfully brought inflation meaningfully lower since the June 2022 peak, it is not clear we will enter a period of low, below-target rate of inflation. We believe a combination of tariffs, tighter immigration, and onshoring may result in a higher inflation regime going forward.
Bel Air Investment Advisors
The Trump administration has vowed to impose additional tariffs on US trading partners, curtail legal immigration, and accelerate the deportation of illegal immigrants. While these policies could be inflationary domestically, these measures will likely be offset by liberal fossil fuel policies and significant deregulation across various industries and sectors, especially in the energy and financial sectors.
BNP Paribas
We expect the market to shift to price in higher US inflation and fewer rate cuts than it currently does.
Citi
With respect to Trump policies, the base case of our global team is tariffs, extension of the 2017 Trump tax cuts, a sharp curb in immigration inflows, a broad deregulation of Biden-era requirements, and a potential boost to animal spirits. They think this cocktail will bring moderately higher inflation in the US, while the effects on US growth may net out at around zero.
Deutsche Bank
For Europe, the Trump victory appears overwhelmingly negative at face value, but it could shake the continent into more positive policy action over the medium term. For 2025, it’s too early for the positive scenario to be considered and the economic performance gap to the US will likely widen. In light of this, our economists have downgraded their growth forecast (0.8% in 2025) while lowering their inflation and ECB terminal rate forecast (to 1.5% by year-end 2025).
Deutsche Bank
The US policy mix will stall progress on inflation, with core PCE expected to remain at or above 2.5% over the next two years, leading the Fed to halt their rate cuts. We now see the fed funds rate at 4.375% by year-end 2025.
HSBC Asset Management
Concerns about inflation are likely to linger and we do not foresee a return to the low inflation environment of the 2010s. Instead, we anticipate inflation settling in the 2-3% range for most major economies, with interest rate cutting cycles expected to be shallow in both the US and Europe.
NatWest
Heading into 2025, we are less optimistic the cooling US inflation trend will continue. However, with a Trump victory we reasonably expect upside risks to core goods prices (tariffs), and our forecast for PCE inflation for the end of 2025 (year on year) has grown from 2.4% to 3.2%.
Ned Davis Research
Our inflation forecast (2.75%-3.25%), GDP expectations (2.0%-2.5%, with a slower second half), Fed policy uncertainty, EPS projection (8.4%), 10-year yield outlook (4.625% fair value), potential for tariffs and deportations, and the presidential cycle suggest the risks increase in the second half.
Nuveen
Though we believe there is further disinflation in the pipeline from housing and other core services, overall inflation is likely to remain above the Fed’s target. Rates are unlikely to fall as much as many expect, and risk assets are likely to be supported.
Pictet Asset Management
Support for risk assets is likely to come from further monetary easing, as central banks respond to improvements in inflation. It will continue to drift lower, although developed market central banks are unlikely to hit their 2% targets during the year.
Pimco
Developed markets (DM) appear on track to return to target inflation levels in 2025, driven by normalizing consumer demand and increased competition for limited job openings.
Tallbacken Capital
Housing and employment will keep the Fed from reaching its inflation target. Both have been tight for some time, and significant solutions to both increasing the supply in both of these markets will not be close at hand.
TD Securities
In the US, tariffs and immigration policies will boost inflation by nearly 1 percentage point by early 2026, eventually weighing on growth and have an important impact on monetary policy. As the labour market softens and wage growth slows, we expect aggregate income growth to cool; we expect the unemployment rate to peak at 4.4% in 2025.
UniCredit
Trump 2.0 will probably be a less inflationary presidency than many fear. After making some symbolic decisions related to targeted tariffs, immigration and taxes in the first months of his presidency, to follow through on campaign promises, Trump is likely to try and shift attention away from economic promises and towards identity issues.
Vanguard
Policy risks may increase inflationary pressures. Therefore, we anticipate that core inflation will remain above 2.5% for most of 2025.