Economists have raised their outlooks on the growth of the gross domestic product (GDP) of the United States.
Experts interviewed by the media claim that the upper boundary of the target range of the benchmark interest rate, which currently stands at 5.5%, will decrease to only 4% by the end of 2025. The mentioned indicator is half a percent higher than the figure that analysts predicted a month ago.
Tom Simons, senior economist at Jefferies, said that the company has significantly revised its forecasts. The experts of the specified firm currently expect that the central bank of the United States will only lower the cost of borrowing once this year.
Also, economists surveyed by the media have cut the probability of a realization of a recession scenario in the US economic system in the next 12 months to 30% from 35% last month. It is worth noting that the current level of materialization of the mentioned risk is the lowest since June 2022.
Moreover, economists surveyed by the media, predict that in 2024 the GDP of the United States will grow by 2.4%. In March, experts’ expectations provided for an increase in the mentioned indicator by 2.2%. The change in the forecast is due to such circumstances of the economic environment of the United States as the growth of consumer spending and rising of private investment.
Besides, economists interviewed by the media expect that the situation in the US labor market will remain stable. It is worth noting that the previous version of this forecast provided for an increase in unemployment, which is currently at 3.8%. Experts expect that the corresponding figure in 2024 will average less than 4% and will not exceed 4.1% in the first quarter of next year.
Kathy Bostjancic, chief economist at Nationwide Mutual Insurance Co., says that the strong position of the United States economy has prevented inflation from continuing its disinflationary path. According to the expert, this means that the Fed will have to delay cutting interest rates.
As we have reported earlier, Fed Chair Signals Rate-Cut Delay.
