Economic Uncertainties Ahead

The current economic landscape is characterized by a "no landing" scenario, where growth remains above potential despite falling inflation. However, looming risks from potential tariffs, migration restrictions, and fiscal deficits could trigger higher inflation and necessitate a shift in monetary policy. The possibility of significant economic weakening into 2025 is contingent on the implementation of certain stagflationary policies, which could lead to a troubling combination of slowing growth and rising inflation.