Fitch: The Federal Reserve is expected to cut interest rates only once this year

Global growth is expected to slow to 2.3 per cent this year, well below trend and down from 2.9 per cent in 2024, Fitch said in its latest global economic outlook, while downgrading its US growth forecast to 1.7 per cent from 2.1 per cent in December and to 1.5 per cent in 2026 from 1.7 per cent.
According to Fitch, tariff hikes will lead to higher prices for US consumers, lower real wages, and increase costs for businesses. The surge in policy uncertainty will have an impact on business investment. It is estimated that the tariff shock will increase US inflation by 1% in the near term, and we believe the Federal Reserve will delay further easing until the fourth quarter of 2025. We now expect the Federal Reserve to cut rates only once this year, but three more cuts are expected in 2026 as the economy slows and tariff levels stabilize. (Golden Ten)