Wall Street economists maintained their forecasts for a sharp slowdown in U.S. economic growth and warned recession risk is still elevated despite the Trump administration’s decision this week to delay major tariffs on a wide range of trading partners.
Morgan Stanley, BNP Paribas and RBC Capital Markets issued projections Thursday for gross domestic product ranging from 0.1% to 0.6% growth in 2025, and 0.5% to 1.5% growth in 2026. They forecast the unemployment rate would climb to almost 5% next year and penciled in higher inflation in the coming quarters.
The lingering pessimism among economists contrasts somewhat with the signal from the stock market, which has rallied since President Donald Trump announced Wednesday that he was implementing a 90-day pause on previously announced "reciprocal” tariffs for countries other than China and raising the duty on Chinese imports to a whopping 145%.
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