Fitch Ratings warns of lower growth, higher inflation, and less Fed rate cuts in 2025
Source Fxstreet
The Fitch Ratings agency downgraded its expectations for US Gross Domestic Product (GDP) growth in 2025 on Thursday, specifically highlighting that the Trump administration's "Liberation Day" tariff announcement poses a direct risk to US economic health.
Key highlights
- Liberation Day takes US tariff rates back to a level last seen in 1909.
- US growth in 2025 is likely to be slower than the 1.7% that we had projected in March, given higher-than-anticipated tariffs.
- Tariff hikes will result in higher consumer prices and lower corporate profits in the US.'
- Upward pressure on goods prices from tariffs means the Fed is likely to become more cautious about further rate cuts in the near term.
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