Goldman Sachs slashes US economic forecasts as tariff impacts grow 'considerably more adverse'
Published On Mar 10, 2025, 1:08 PM
Goldman Sachs has reduced its forecast for the U.S. economy, predicting a GDP growth of only 1.7% for 2025, down from 2.4%. This downgrade is attributed to the increasing adverse impacts of tariff policies under President Trump, which are expected to significantly raise the average U.S. tariff rate and consequently lead to higher consumer prices and diminished real incomes. Goldman also anticipates the Federal Reserve will hold interest rates steady in the near term but may cut rates later in the year. Concerns about a recession have risen, with some analysts estimating a 25-30% likelihood of such an event occurring this year.
Stock Forecasts
SPY
Negative
With Goldman Sachs' downgrade of economic growth forecasts and increased tariffs likely leading to consumer price hikes and investment delays, it suggests a downturn in market conditions. These factors could negatively impact major indices and the broader stock market, particularly sectors sensitive to consumer spending. Expect increased volatility in the market as investors react to these forecasts and the potential for recession.
TSLA
Negative
The increase in tariffs and rising inflation can hurt profit margins for companies, especially within the technology sector. Companies like Tesla and Nvidia, which are heavily reliant on consumer demand, may face significant challenges. Thus, investors should consider the risks in these stocks.
QQQ
Negative
Overall, major indices are likely to face headwinds due to the grim economic outlook, with investor sentiment trending downward as recession fears loom and tariffs escalate. The SPY ETF, which tracks the S&P 500, will likely reflect these negative sentiments and could experience pressure in the short term.
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