US growth forecast slashed over Trump’s tariffs policy

The US Federal Reserve has downgraded its forecast for US economic growth, citing the uncertainty surrounding Donald Trump’s aggressive tariff policy.

The Fed’s Open Market Committee (FOMC) now projects 1.7% growth for the US economy in 2025, down from its 2.1% forecast in December before Trump's inauguration. Additionally, the Fed has maintained interest rates at 4.5%.

Jerome Powell, the Fed Chair, noted that any inflation increase caused by tariffs could be "transitory."

Despite market confidence, the FOMC warned that the disruptive trade policy could lead to ongoing uncertainty regarding the country’s economic outlook for the rest of the year.

Powell also acknowledged a decline in consumer spending, cautioning that the president’s trade policies could contribute to higher inflation.

"The SEP [Summary of Economic Projections] doesn't really show further downward progress on inflation this year and that's really due to the tariffs coming in," Powell said.

(QG - Source: The Telegraph - Picture : © Unsplash)