As the US economy loses its invincible sheen, forecasts from 49 economists predict a slowdown and rising inflation. Stemming from President Trump’s hefty tariffs and governmental disruptions, the growth expectation has been revised down to 1.6% for 2025, a stark drop from the previous estimate of 2.3%. Signs of a waning consumer and business spending sentiment permeate the economic landscape, signalling turbulence ahead.
The Organisation for Economic Co-operation and Development (OECD) highlights the detrimental global impact of Trump’s trade policies, anticipating slowed growth across G20 nations for 2025 and 2026. John Hopkins economist Robert Barbera warns of the unprecedented interplay between tariffs, tax reforms, and public sector cuts affecting the economy. The unpredictability of which policies will withstand legal challenges adds to the fog of uncertainty.
Looking ahead, economists expect an uptick in inflation, forecasting that the annual rate of core personal consumption expenditures will reach 2.8% by the end of 2025, compared to the earlier 2.5% prediction. As the Federal Reserve gears up for a crucial meeting, inaction on interest rates may be a predominant theme while the reliability of economic data remains a cause for concern among analysts.
Recent developments include Mexican President Claudia Sheinbaum gaining approval amid Trump’s threats and prospects of a meeting between Trump and China’s President Xi Jinping being on the horizon. Meanwhile, notable changes at Meta under Joel Kaplan, who influences the firm’s rightward shift, illustrate the significant shifts in corporate governance during the Trump administration. Kaplan’s tactics have sparked controversy around user safety versus political appeasement, making him a polarising figure within the company.
In commentary, analysts stress the critical decisions facing Democrats regarding economic strategies to counter Trump’s influence, while warnings about US bond performance hint at broader economic instability. Amidst this tumultuous backdrop, the stakes have never been higher for American economic policy and corporate accountability.
Economists are predicting a downturn in US economic growth, revised to 1.6% for 2025, driven by Trump’s tariffs and policy shifts, alongside rising inflation expectations. The OECD warns of a negative global impact, while significant corporate strategy changes at Meta signal broader political ramifications. Concerns over spending and economic data reliability further complicate the outlook.
In summary, the US economy is at a critical juncture, grappling with slowing growth and rising inflation fueled by political decisions and global trade policies. The forecasted growth drop to 1.6% in 2025 and a spike in inflation reflects profound uncertainty, exacerbated by the unpredictability of ongoing policy implications. As political manoeuvring continues within major corporations like Meta, the economic narrative remains intricate and fraught with potential challenges ahead.
Original Source: www.ft.com
