Deutsche Bank base case is now for a higher Fed terminal rate than previously expected

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Deutsche Bank, in brief:

• base case for 2025 is stronger US growth and inflation
• higher FOMC terminal rate than previously expected
• opposite
  applies to Europe

On the US DB:

• assumes modest US
  tax cuts
• strong deregulation efforts
• more supportive
  financial conditions
• assume a 10%
  increase in the tariff rate on imports from China in H1 (ratcheting
  up a further 10pp in H2)
• equalisation of tariff rates on motor
  vehicles with Europe
• assume a 5% universal baseline tariff (more likely
  to be implemented late 2025/early 2026)

This article was written by Eamonn Sheridan at www.forexlive.com.