In terms of growth figures, the US economy expanded by 0.6% quarter-on-quarter in the fourth quarter of 2024. This figure is in line with what was predicted by the Fed’s nowcasting model, based on data published during the quarter. So it comes as no surprise, and shows that the US economy is experiencing a very relative slowdown in activity. For the start of his term in office, Trump can therefore count on a still resilient economy and a labour market that is once again performing well in the final months of 2024 (January’s figures will be published very shortly).

The US figure also contrasts with the stagnation of activity in the eurozone over the same period. It should be pointed out in passing that the eurozone is itself subject to major divergences, with negative growth in Germany and France and much more comfortable growth in Spain, for example.

Monetary policies bound to diverge

Against this backdrop, the two main central banks were bound to diverge: the risk of a return to inflation is not the same in a resilient economy as in a sluggish one. This is a simple way of understanding why the Fed decided to keep its key rates unchanged, while the Here too, there are no surprises. These decisions were widely anticipated by the financial markets.

Despite this, ECB president Christine Lagarde was somewhat (overly) optimistic. On the inflation front, she says that all the components of inflation remain on a positive trend. In my view, this is a very optimistic view of the figures for the last few months, in which both the food and energy components are feeling the effects of price rises on world markets. On the growth front, the ECB seems to want to believe in an imminent recovery scenario, thanks in particular to a less restrictive monetary policy. We want to believe it, of course, and the slight rebound in confidence indicators in the eurozone in January could even support this scenario. But we might also be forgetting a little too quickly the severe recession in the manufacturing sector, the recent weakness in job creation, the eurozone’s lack of competitiveness and even the likely measures to be imposed by Donald Trump, particularly in the area of trade. Let’s also wait for the outcome of the German elections and the forthcoming votes of no confidence in the French government before we start smiling...

Philippe Ledent is senior economist at ING Belux.

This article was originally published in .