In the Global Economic Outlook (GEO) report published on Tuesday, Fitch Ratings said that they have lowered the United States (US) economic growth forecast to 1.7% from 2.1% in December's report and cut the 2026 growth projection to 1.5% from 1.7%.
Key takeaways
"We expect world growth to slow to 2.3% this year, well below trend and down from 2.9% in 2024."
"Fiscal easing in China and Germany will cushion the impact of higher US import tariffs, but growth in the eurozone this year will still be a lot weaker than forecast in the December GEO."
"Tariff hikes will result in higher US consumer prices, reduce real wages, and increase companies’ costs, and the surge in policy uncertainty will take a toll on business investment."
"With the tariff shock estimated to add 1pp to US near-term inflation, we believe the Fed will delay further easing until 4Q25."
"We now expect the Fed to cut just once this year, but then expect three more cuts in 2026 as the economy slows and tariff levels stabilise."
Market reaction
The US Dollar Index (DXY) clings to modest daily gains at around 103.50 following this report.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY grinds higher above 149.50, BoJ Ueda's presser eyed
USD/JPY is on a steady rise, back above 149.50 in the Asian session on Wednesday. The Bank of Japan left the policy rate unchanged at 0.50% at its March meeting, weighing slightly on the Japanese Yen (JPY). The focus shifts to Governor Ueda's press conference for fresh cues on future rate hikes.
Gold renews all-time highs ahead of the Fed verdict
Gold price is picking up fresh bids to hit a new record high near $3,040 early Wednesday. Gold buyers regain poise amid looming geopolitical risks while bracing for the all-important US Federal Reserve monetary policy announcements.
AUD/USD remains stuck in a range near 0.6350 as Fed decision looms
AUD/USD consolidates in a tight band near 0.6350 early Wednesday as traders turn to the sidelines ahead of the Fed policy decision. The US Dollar consolidates near a five-month low amid dovish Fed bets, cushioning the Aussie's downside Meanwhile, geopolitical tensions remain a drag on the pair.
Bitcoin, Ethereum and Ripple expect volatility around the FOMC meeting
Bitcoin and Ripple prices face resistance around their key levels; a firm close above indicates recovery on the cards, while Ethereum price finds support at its critical level, suggesting a bounce ahead.
Tariff wars are stories that usually end badly
In a 1933 article on national self-sufficiency1, British economist John Maynard Keynes advised “those who seek to disembarrass a country from its entanglements” to be “very slow and wary” and illustrated his point with the following image: “It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction”.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.