Fitch: Expects the Federal Reserve to cut interest rates twice in the first half of the year; unemployment rate may stabilize at 4.6% this year
Svmuu News: Fitch has raised its 2025 U.S. GDP growth forecast and its 2026 growth projection. This adjustment was made after incorporating economic data that was delayed due to the government shutdown at the end of last year.Fitch currently expects GDP growth of 2.1% in 2025, up from the 1.8% forecast in its December 2025 Global Economic Outlook (GEO).At the same time, the 2026 growth forecast has been raised from 1.9% in the previous report to 2.0%. Given the incompleteness of October data, recent CPI inflation trends are difficult to interpret.Inflation is estimated to have risen to 3.0% in December 2025 (from 2.7% in November) and is expected to rise further in 2026, reaching 3.2% by year-end, driven by the delayed pass-through of tariffs.As the impact of slowing job growth is offset by a decline in labor force growth, the average unemployment rate in 2026 is projected to be 4.6%, close to recent levels. We expect the Federal Reserve (Federal Reserve) to cut interest rates twice in the first half of 2026, lowering the federal funds rate (upper bound) to 3.25%. (Jin Shi)
Source:Odaily · Source Link
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