Macro Insights Weekly - Coming US economic noise and Fed

Game of tariffs has begun. Which tariffs stay and which are bluffs will be the hallmark of things to come. Trade, immigration, and fiscal noise will constrain the Fed's policy easing space.
Growth rates in Mexico and Canada are bound to get hit. China's exporters will feel the pain too.
In the US, we see near-term downside to growth and upside to inflation.
We forecast 2% growth in 2025-26 and inflation in the 2.5-3.0% range.
The Fed will find it hard to cut rates substantially in this context.
A terminal rate of 4.0% is in store, in our view.