Fitch: Deep cuts to global forecasters global trade war escalates

Fitch is out on global turmoil and says:

• Deep cuts to growth forecast says global trade war escalates.
• Still expects Federal Reserve to wait until Q4 before cutting rates despite deteriorating US growth outlook.
• We now expect deeper rate cuts from ECB and in emerging markets.
• Expect some additional US tariff revenues to be recycled back into US economy over the next 18 months, including through tax cuts.
• We have lowered our 2025 bread oil price assumption by the five US dollars to $65.
• US ‘Liberation Day’ tariff hikes were far worse than expected.

Growth forecast from Fitch now see:

• Fitch has cut world growth in 2025 by 0.4pp and China and US growth by 0.5pp

• U.S. 2025 growth expected at 1.2% annually, but slowing to 0.4% YoY in Q4 2025

• China’s growth forecast to fall below 4% in both 2025 and 2026

• Eurozone growth projected to remain well below 1%

• Global growth expected to drop below 2% in 2025 – the weakest since 2009, excluding the pandemic

This article was written by Greg Michalowski at www.forexlive.com.