Goldman Sachs reduced US economic growth prediction
reports Mehr News Agency Style = “Text-align: Justify”> Goldman Sachs reduced its prediction of US GDP in year 2 to 4.9 % in a research note. The report said that the decline is that our assumptions about business policies have become more inappropriate.
In this note, Goldman also increases its prediction of the Federal Reserve’s desired inflation index and expects the index to reach 5 % by the end of the year, while the previous forecast was in the middle range.
Ian Hatzius Economic Group manager
Reduction of Economic Growth Forecast
Goldman Sachs is not the only institution that is a darker view of the American economy. On Friday, Michael Gp. , Morgan Stanley’s senior economist, reduced the forecast of year 2 to 4.9 percent to 4.9 %.
GPAN also expects the main index of personal consumption spending, which is the Federal Favorite Favorite Criteria, to 4.9 % by the end of the year, while the previous forecast was 4.9 %.
Tariff impact
Group Goldman announced in his note that it now expects the US tariff rate of 5 % to increase this year, twice as much as the previous forecast and five times the surface observed in the first Trump presidency.
Hatzius explained that tariffs would have a negative effect on the economy in three ways. First, the implementation of new tariffs increases the price of goods for consumers and thus reduces their real income. Second, these tariffs usually make the financial conditions worse, and the third, the uncertainty about the implementation of tariffs is likely to lead companies to delay investment.
Hatzius believes that the combination of slower economic growth and sustainable inflation can still create a space for the federal interest rate reduction in June and December.
, however, the uncertainty of Trump’s policies is likely to keep the central bank currently keep interest rates.
He added that the short-term view is that the Federal Free Market Committee prefers to stay on the sidelines and not make important decisions until the economic policies are clearer.
Increase the likelihood of stagnation
Although the discussion is still unlikely to stagnate the main scenario, discussions have intensified. Mohammed Al-Erian , former Pacific CEO Inostomat Economics in the US see Robin 2 % to 5 %, while Trump’s tariffs were only 2 % before the new wave of Trump’s tariffs began.
betting and predictive markets also show the likelihood of stagnation. According to the PlayMarket platform data, the possibility that the US recession will be officially announced by the end of the year has increased from 2 % to about 2 percent on Monday. As the forecast of economic growth is reduced, the stock market has also been under pressure.
