Bank of America Analyzes U.S. Economic Resilience Amid Global Changes

According to Odaily, Bank of America has highlighted the resilience of the U.S. economy as global markets approach the inauguration of Donald Trump. Recent data shows strong employment figures and stable retail sales, with core inflation at 3.2%, remaining at a high level. The cyclical and structural dynamics of the U.S. economy align with the natural interest rate, which is close to the current Federal Reserve funds rate. However, inflation remains stubbornly above target, providing the Federal Reserve with a reason to end the easing cycle. The potential impact of a second Trump administration on the U.S. and global economies is uncertain, with protectionist policies likely affecting inflation expectations. Additionally, excessive fiscal stimulus could impact the economy's operational potential. Contrary to market pricing, Bank of America believes that the Federal Reserve has already completed its rate cuts.