Economic growth expected in the U.S. following President Donald Trump's trade agreement with China
With Trump's China trade deal, some big banks foresee less chance of a US recession
Amidst the banking giants of Wall Street, Goldman Sachs and JP Morgan are now painting a rosier picture for America's economic future. Let's dive into the details of how these financial heavyweights see the prospects for the US economy in 2025, following President Trump's landmark trade agreement with China.
Goldman Sachs:- Recession Odds: The famed investment bank has reduced the chance of a US recession in 2025 from 45% to 35%.- GDP Growth: They've bumped up their predicted GDP growth for the USA in 2025 from 0% to 1%.- Fed Interest Rate Cuts: Instead of the earlier expectation of three cuts in 2025 starting from July, Goldman now envisions only a single rate cut, coming in December 2025.- S&P 500 Target: The investment bank has ramped up its year-end S&P 500 target from 5,900 to 6,100, thanks to the tariff-reducing effects of the US-China trade deal.
JPMorgan Chase:- Recession Chances: Following the agreement, JPMorgan took a sizeable step back from predicting a 2025 US recession, moving the odds from 60% to a mere 50% or lower.- GDP Growth: They've revised their 2025 US GDP growth forecast to 0.6%, up from the earlier 0.2%.- Inflation Outlook: JPMorgan expects underlying inflation to rise to 3.5% rather than their previous forecast of 4%.- Fed Interest Rate Cuts: Like Goldman, JPMorgan now predicts only a single rate cut, coming in December 2025.
This newfound optimism from these financial titans reflects the positive impact of the trade agreement, which lessens the tensions and tariffs between the US and China, in turn, lowering the risk of a 2025 recession. Caution remains, as the 35% and 50% recession probabilities still represent a significant risk.
Investing in stocks, particularly those listed on the S&P 500, could potentially yield returns due to the optimistic outlook from financial titans like Goldman Sachs and JP Morgan Chase, both predicting a single Fed interest rate cut in December 2025 following President Trump's China trade deal. The enhanced prospects for the US economy in 2025, as indicated by these banking giants, suggest significant possibilities in the business sector, with Goldman Sachs raising its year-end S&P 500 target from 5,900 to 6,100.
