The Economic Estimating Conference adopted S&P Global's control forecast as its baseline for the national economy after reviewing newly available fourth-quarter 2024 data and discussing alternative scenarios. Vasilka McElarney of the Economic Development Research (EDR) unit presented the forecast and the conference indicated adoption by voice consensus.

The forecast matters because the conference's baseline is used in subsequent revenue and policy estimating work. McElarney said the S&P control forecast carries a 50% probability and is summarized as "stronger momentum outweighs intensifying headwinds," with key assumptions including a universal 10% tariff phased in over a year, an immediate 20% tariff on imports from China, and a 25% tariff on steel and aluminum effective March 12. McElarney attributed the summary and those trade-policy assumptions to S&P.

McElarney told members that actuals through the fourth quarter of 2024 showed stronger-than-expected activity in several areas: real GDP growth of 3.1% for fiscal 2024, nonfarm payroll employment up 1.3% year-over-year (143,000 net new payroll jobs in January on a revised series), and nominal personal income growth of 5.5% for fiscal 2024. She reported that the PCE price index rose 2.9% for fiscal 2024 and that the unemployment rate averaged 3.8% in fiscal 2024, with a 4.0% reading in January 2025. McElarney said S&P's baseline expects real GDP growth of 2.6% in fiscal 2025, higher than the July forecast, and a slightly lower unemployment peak than previously forecast.

S&P's baseline also incorporates assumptions about tax policy and monetary policy: McElarney said S&P assumes a lower corporate tax rate (described in the forecast as 15% for domestically producing corporations) and that the Federal Reserve will cut policy rates once in 2025. She noted S&P's view that recent wage gains (average hourly earnings rose about 4.1% over the 12 months ending in January) are stronger than consistent with a 2% inflation target and that trade-policy assumptions could push consumer goods prices higher.

Conference discussion focused on risk allocation across the baseline and alternative scenarios. McElarney presented two alternatives (pessimistic and optimistic), each assigned a 25% probability. The pessimistic scenario assumes broadly higher tariffs and slower growth after 2025, with unemployment rising over the forecast horizon; the optimistic scenario assumes lower tariffs and somewhat stronger growth. Several participants said they preferred caution and suggested giving greater weight to downside risks, while others said they were comfortable adopting the control forecast as presented. Vince Aldridge of the House of Representatives moved to adopt the control forecast and the group indicated adoption by voice consensus; no roll-call vote was recorded.

The meeting closed with the conference noting it would reconvene at 2:00 p.m. for the revenue estimating conference. No formal amendments to the forecast were recorded at this meeting.