The US economy shows resilience that supports a strong dollar, benefiting importers and some domestic sectors while creating currency risks and headwinds for exporters and global borrowers amid policy uncertainty.

Leading indicators for late 2024 show real GDP growth revised to 3.1% year over year in Q3, with consumer confidence near 109 in October and solid retail sales, complemented by a robust ISM Services PMI around 56 and steady inflation data.

This strength backs a higher-for-longer rate view, as inflation remains sticky with October CPI up 0.2% and 2.6% year over year, supporting the dollar and delaying rate cuts.

The near-term outlook anticipates slower real GDP growth in 2025 and 2026, with inflation easing gradually and the dollar staying strong, while risks include a soft landing, mild recession, or stagflation.

Possible scenarios range from soft landing with dollar strength to mild recession or stagflation, with potential de-dollarization creating a more multipolar monetary system.

Global implications include ripple effects on trade balances and debt burdens of dollar-denominated debt in emerging markets, prompting policy responses from other central banks and shifting regulatory considerations.

Markets have pushed back expectations for Fed rate cuts as late-2024 to early-2025 data keep rate differentials widening and the dollar firming.

Strategic guidance for businesses calls for cost management, supply chain diversification, investment in AI, and data-driven monetary policy to support long-term growth and debt sustainability.

Forecasts point to 2025 growth around 1.7–1.8% and 2026 around 1.4–1.5%, with inflation near 2.9–3.2% and unemployment edging higher, potentially rebounding in 2027.

Sticky inflation underscores a higher-for-longer stance, as October 2024 CPI rose 0.2% month over month and 2.6% year over year, reinforcing dollar strength.

Emerging markets face debt and inflation pressures from a strong dollar, though supply-chain diversification and improving growth differentials in places like Mexico, Vietnam, Taiwan, and India offer opportunities.

Longer-term view sees continued dollar dominance as a reserve currency, with AI-driven growth benefits but risks from tariffs, policy uncertainty, and geopolitical shifts.