BNP Paribas economists project US GDP growth at 2.4% in 2026 with inflation at 3.5%, keeping Fed rates unchanged.
BNP Paribas economists outlined a gradual depreciation path for the US dollar, citing above-potential GDP growth of 2.4% in 2026. Inflation is expected to overshoot at 3.5%, while the Federal Reserve maintains its target range at 3.5%-3.75%.
The forecast assumes the Federal Open Market Committee will adopt a balanced policy stance, avoiding aggressive rate cuts despite inflationary pressures. Prior projections had not fully accounted for sustained growth above potential, signaling a shift in expectations.
No immediate market reaction was detailed in the analysis, though the outlook suggests prolonged dollar weakness if conditions hold.