Uncertainty Triggers a “Downgrade Parade” | S2 E022 | 03-21-25
Central banks worldwide have reduced their global GDP forecasts due to trade uncertainty, potential inflation increases, and weakening consumer spending. The Federal Reserve lowered US growth expectations to 1.7% for the year, following similar cuts from the Bank of England and European Central Bank.
• OECD has cut global GDP forecasts for this year and next
• Federal Reserve reduced US GDP forecast to 1.7%, down from 2.1% in December
• Bank of England cut UK GDP forecast in half last month
• ECB also lowered growth expectations due to trade uncertainty
• April 2nd has been designated as “tariff deadline day” with expected volatility
• Trade wars likely to remain a first-half of 2025 theme
• Second half may focus more on the Tax Cuts and Jobs Act
• Downside risks to growth and potential inflation pressure exist
• Long-term US economic outlook remains relatively strong
• Consumer spending weakness and business investment hesitancy are major concerns
• Corporate earnings downgrades may follow during April earnings season
• Major banks begin reporting earnings week of April 7th
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