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Monthly update of The Conference Board's forecast for the US economy
The outlook is clearer with the passage of the One Big Beautiful Bill Act (OBBBA). However, the Conference Board estimates sizable shocks to GDP growth, inflation, and employment in the coming months as existing baseline tariffs reverberate through the economy. The set of reciprocal tariffs, scheduled to take place on 1 August, creates additional downside risks going into the holiday season. However, the limited passthrough of exiting tariffs so far and remarkable resilience in the labor market amid significant uncertainty suggest the bulk of the economic weakness would likely affect Q4 and early 2026, later than we previously anticipated. Given this outlook, we anticipate the FOMC will likely resume cutting interest rates in December, to reflect the shift in growth nadir to Q4 from Q3.
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