War’s Impact on the U.S. Minimal … but So Much Could Go Wrong: U.S. Outlook to 2026

The Conference Board of Canada, 19 pages, April 29, 2022
Impact Paper
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This quarterly report focuses on the latest economic developments in the U.S. economy, tracking trends in labour, consumer, energy and housing markets, and examining industries and regions. Monetary and fiscal policy assumptions are also included.

Document Highlights

  • The impact on the U.S. economy of the war in Ukraine should be minimal if the conflict remains contained within Ukraine’s borders. We expect real GDP to expand by 3.6 per cent this year.
  • The war and the resulting spike in gasoline prices to well above $4 per gallon will lead to higher inflation over the near term.
  • To contain inflation, the U.S. Federal Reserve will increase interest rates four times this year. If inflationary pressures persist, we could see even more rate increases.
  • Fiscal deficits will remain high over the near term, as President Joe Biden hopes to spend more on social programs.
  • To date, consumers have shrugged off the effects of higher inflation and continued to spend.
  • Higher oil prices might not automatically lead to ramped-up oil production, given the ongoing volatility in oil prices as result of this war for which the outcome is impossible to predict.

Table of Contents

Key findings
Aggregate Demand
Financial Markets
Fiscal Policy
Labour Markets
Appendix A: Methodology

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