In the Global Economic Perspectives (GEO) report published on Tuesday, Fitch Ratings said they have reduced US economic growth forecast to 1.7% from 2.1% in the December report and cut the growth projection by 2026 to 1.5% from 1.7%.
Key points
“We hope that world growth will slowly be slowed down this year, well below the trend and below 2.9% in 2024.”
“Fiscal relaxation in China and Germany will cushion the impact of the highest import tariffs in the US, but eurozone growth this year will continue to be much weaker than predicted in the December GEO.”
“The increase in tariffs will result in higher prices for US consumers, reduce real wages and increase companies, and increased political uncertainty will affect business investment.”
“With the estimated tariff clash in adding 1PP to the short -term inflation of the US, we believe that the Fed will delay a greater relaxation until 4T25.”
“Now we expect the Fed to cut only once this year, but then we expect three more cuts in 2026 as the economy slows down and tariff levels stabilize.”
Market reaction
The dollar index clings to modest daily profits around 103.50 after this report.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
