The bank is now forecasting a significant GDP decline for 2025, from a previous assessment of 1.3 percent growth to a decline of 0.3 percent. Moreover, unemployment is expected to rise to 5.3 percent.
The bank's assessment follows after a number of other actors, including Citi and UBS, have predicted a similar development. JP Morgan Chase & Co is, however, the bank with the darkest outlook for the US economic growth.
The market development is simultaneously leading several actors to believe that the central bank, the Federal Reserve (Fed), will be forced to make a series of interest rate cuts. For example, UBS is now estimating that the Fed will make its first cut as early as June and then follow up with cuts at every meeting, which would imply an interest rate level of 2.75-3 percent in January compared to today's 4.25-4.5 percent.
