USA
Deal or no deal?
Despite the lack of a boost from monetary policy, the US economy is on course for growth. We expect a 'deal' in the Middle East and that the situation will calm down in the coming weeks, but that market volatility will remain high until then.
According to preliminary calculations, the Flash S&P Global US Composite PMI (purchasing managers' index for the services and manufacturing sectors) fell by 0.5 points to 51.4 points in March 2026 compared to the previous month. This indicator, which is 6 months ahead of the previous months, thus signals a clear slowdown but still economic growth. The war with Iran is increasingly unsettling economic players and higher oil prices are driving up inflation. For this reason, and not least because of the mid-term elections in the fall, US President Trump has a strong interest in ending the conflict soon. A deal will therefore be reached.
The labor market is cooling
In February, 92,000 non-farm jobs were lost, which was clearly below expectations of a slight increase but could also have to do with the extreme weather conditions in February. In addition, jobs for the previous months (January and December) were also revised downwards, indicating a sharp cooling of the labor market. However, unemployment only rose by a moderate 0.1% month-on-month to 4.4% in February (which is the same figure as last December).
Further rate cuts postponed
At its meeting on 17-18 March 2026, the Fed maintained its key interest rate (Fed Fund Rate) at 3.5-3.75% despite the weakening labor market. As the rise in oil prices due to the warlike events in the Persian Gulf is increasing inflationary pressure, but the specific impact cannot yet be assessed, the Fed is holding off on further rate cuts for the time being. The Fed is still assuming economic growth of 2.4 % for 2026. This is also due to the fact that the USA has become a net oil exporter in recent years thanks to shale oil production and is therefore benefiting from rising oil prices. The forecasts for core inflation (excluding food and energy prices) in 2026 have been adjusted only slightly upwards to 2.7%. In any case, the current situation poses a challenge for the Fed to find the right balance between its two mandates of price stability and full employment.
Solid earnings reports - slightly lower valuation
The earnings reports of the S&P 500 companies also exceeded forecasts for the fourth quarter of 2025 with an impressive year-on-year increase of 14.0%. Expectations for the earnings reports for Q1 2026 are also 12.5% growth. The current stock market valuation is therefore supported by solid earnings growth. With a price/earnings ratio for the S&P 500 of 20.3 (based on analysts' earnings estimates for the next 12 months), the market valuation has fallen further in recent months, but remains just above the 5-year average of 20.0 and 7.0% above the 10-year average of 18.9.
GDP 2026 (IMF): +2.40%
Inflation 2026 (IMF): +2.50%
Fed Fund Rate: +3.50-3.75%
Sources: Trading Economics, FuW, US Bureau of Labor Statistics, Statista, IMF, FMOC
As of: 25.03.2026