The economy played a critical role in the 2024 presidential race, creating the conditions not only for Donald Trump to trounce Kamala Harris and for the Republicans to gain control of the Senate and House but possibly also for a counter-elite to usher in a new power structure.

Three issues are key to deciphering what 2024-25 will hold for the US economy, which is now the sole major engine of global growth. I will stick my neck out and offer some illustrative probabilities.

The Western-led global economic order has had a bad 2023. Surprisingly, the primary cause was not the emergence of an alternative order led by China, as some had anticipated.

Even in the highly unlikely event that the current geopolitical situation improves rapidly, a deep sense of uncertainty will remain, driven by five economic and financial factors.

The concept of "transitory inflation" is making a comeback. Looking ahead to the rest of the year and early 2024, three inflation scenarios stand out for me.

Key officials at the US Federal Reserve have finally acknowledged that they mischaracterised an inflationary surge that has proven larger and more persistent than they expected. The Fed must now follow up by doing two things quickly.

After initially and persistently misreading US inflation dynamics, more Fed officials are now starting to come to grips with the situation. The Fed would be well advised to catch up even faster.

How transitory is today's inflation? One camp has a surprisingly strong conviction that the current uptick in inflation will sharply reverse itself. Others, including me, are not so sure.

No matter how big an economy, it is likely to be influenced by US economic growth, international financial stability, and monetary policy spillovers. The challenge for other countries now is to reduce America's "execution risk".

Central banks have proved willing and able to keep stock and bond prices elevated. For long-term economic well-being and financial stability, a policy response is needed that extends well beyond their traditional remit.

Calendar 2019 is ending on a relatively positive note, especially compared to the same time in 2018. Policymakers have a chance to "fix the roof while the sun is shining".

Christine Lagarde will soon succeed Mario Draghi as president of the ECB. She is taking the reins at precisely the right moment for Europe to make the changes needed to avoid a second lost decade.

Many economists argue that resolving US-China trade tensions is the best way to avoid significant global economic and financial disruption. Yet, while necessary, this would be far from sufficient.

The inflation outlook is subject to far wider possibilities than policymakers have considered. Too little focus on structural factors could pose serious risks to economic wellbeing and financial stability.

If the EU were a soccer team, it would not lose games for lack of a plan or inadequate capacity. The problem is that the team is not playing cohesively, and the top players are struggling individually.

The US/China trade confrontation is heating up and market analysts are scrambling to figure out what will come next. It's tempting to rely on historical experience but history is likely to be a poor guide.

It should come as no surprise that enthusiasm for economic and financial globalisation has faltered. Building consensus around a revised unifying paradigm will not be easy.

However tempting it may be to focus our wishes on our own immediate desires, it is imperative this year that investors' wish lists take into account the big economic and policy picture.

The retreat of advanced economies from the global economy could have far-reaching consequences.

Until recently, the expectation was that if professional economists achieved a technocratic consensus on a given policy approach, political leaders would listen.