The Conference Board Economic Forecast for the US Economy

July 11, 2025

Shifting the Worst of Tariffs from Q3 to Q4

The outlook is clearer with the passage of the recent fiscal legilsation. 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.