The main Wall Street banks cut their PBI forecasts for the world’s largest economy. What is the impact of the commercial war.
Goldman Sachs adjusted down his Growth forecast for the United States Due to the tariff policy of Donald Trump. In a report published on Monday, the American bank reduced its GDP estimation for 2025 2.4% to 1.7%.
The chief economist of Goldman Sachs, Jan Hatzius, explained that this review is due to the fact that the expectations of commercial policy worsened considerably. As a result, The bank also increased its PCE inflation projection, The preferred measure by the Federal Reserve to measure the evolution of prices, raising it to 3% at the end of the year, compared to 2% they had previously anticipated.
Goldman Sachs now expects the United States average tariff rate to increase by 10 percentage points this yeartwice what had predicted before and five times more than during Trump’s first mandate. Bank experts explain that they expect the application of additional tariffs to key goodsa global cars and a reciprocal tariff.
The latter, according to analysts, is the most significant because the administration considers, for example, the VAT of 20% of Europe as equivalent to a tariffdespite the fact that this tax applies equally to imported and national goods. If it is implemented, a reciprocal tariff based on VAT could increase the United States average tariff rate by up to 10 percentage points, or even 15, if the exceptions are lower than what is expected.
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What will be the impact of tariffs, according to Goldman Sachs
He Increase in tariffs will cause an increase in prices, It will reduce the real income of consumers, restrict financial conditions and make companies delay their investments until they have more clarity about the uncertain commercial policy of the president.
This is the first trim in the Goldman Sachs Growth Growth forecast In two and a half years, which places it in line with other firms that have also moderated their optimism about the US economy.
For example, Morgan Stanley reduced his prognosis of the GDP of the United States For this year, lowering it from 1.9%to 1.5%, and adjusted its estimate of PCE inflation to 2.7%, from 2.5%. In addition, experts such as Mohamed El-Erian, former executive director of Pimco, increased the probability of a recession in the United States, raising it to 25-30%, compared to 10% estimated when Trump assumed the presidency.
Similarly, Consensus increased up to 40% the probability of recession in the United States By 2025, compared to 23% that was foreseen a couple of weeks ago.
Source: Ambito
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