Nordic Outlook US

The US economy demonstrates resilient growth despite war-related uncertainties, though rising demand-side inflation is prompting a more hawkish Fed stance. Consequently, Danske Bank has raised its inflation forecasts and expects two rate hikes in late 2026 and early 2027.

Key Takeaways

• 1.The US economy is seeing hotter-than-expected growth driven by AI-related investment and fiscal tailwinds, leading to higher inflation forecasts.
• 2.The Federal Reserve is expected to shift to a tightening bias, with rate hikes projected for December 2026 and March 2027.
• 3.The war in Iran contributes to inflationary pressure, and while the US economy has remained resilient, household disposable income is under pressure due to low real wage growth.

Table of Contents

• Nominal growth heats up
• Demand-driven inflation concerns increase the likelihood of Fed hikes next winter
• Disclosures
• Analyst certification
• Regulation
• Conflicts of interest
• Financial models and/or methodology used in this research report
• Risk warning
• General disclaimer

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