The economic outlook for the United States from 2025 to 2027 is cautiously optimistic, according to UBS.
The political dynamics, with Republicans expected to control both the White House and Congress, will likely influence fiscal policies such as the extension of the 2017 Tax Cuts and Jobs Act and increased tariffs on Chinese imports.
UBS forecasts a moderate economic slowdown, with a decline in nonfarm payroll growth and easing inflation in 2025.
The implementation of new tariffs and fiscal policy changes will create a challenging economic environment, complicating decision-making for the Federal Open Market Committee (FOMC).
However, by 2027, as the effects of tariffs and uncertainties surrounding tax policies dissipate, UBS foresees a more favorable economic environment.
The overall economic trajectory will be influenced by unpredictable factors such as the timing of fiscal policy changes and demographic shifts.
The interplay between U.S. fiscal strategies and international trade dynamics will be crucial in determining the health of the economy.