Economic Growth Forecasts Tumble as Trump Tariffs Loom
Weaker-than-expected data has led to a decline in US economic growth forecasts, with some economists now predicting a slower pace of growth than initially thought. The Atlanta Fed's GDPNow tool projects a 2.8% decline in the first quarter, down from a previous projection of a 1.5% decline. Uncertainty around President Trump's tariff policy appears to be weighing on business activity, particularly in the manufacturing sector.
- This weakening economic outlook underscores the vulnerability of global supply chains, where timely delivery of parts is crucial for meeting production goals, and may signal a more prolonged period of economic uncertainty.
- Will policymakers respond to the growing concerns about trade tensions with aggressive monetary easing or fiscal stimulus, potentially alleviating some pressure on business investment and consumer spending?