IMF Report Shows Stronger-Than-Expected U.S. Growth
A new report states that President Trump’s tariffs have not hurt the economy as much as expected.
The report, from the International Monetary Fund, predicts the U.S. Economy will grow 2% in 2025, slightly better than expected. That number is still lower than predictions in January, prior to the President’s April announcement of monster global tariffs.
The IMF projects that the U.S. Gross Domestic Product will grow 2% in 2025 and 2.1% in 2026. That’s up from the 1.8% projection that the IMF made in April, but lower than the 2.7% prediction made in January.
Inflation Cooling and Economic Risks Easing
The IMF report also states the inflation rate will continue to fall over the next two years. Inflation risk was central to the case that tariffs would wreck the economy. That seems to be easing as well.
Of course, the main reason tariffs haven’t hurt the economy as much as many economists feared, is that the Administration has struck trade deals that have lowered the original tariff threats.
It also doesn’t mean that the tariff risk is gone. Trade tension could still impact the global economy, if companies decide to pass on more of the tariff costs to the customer.
Mixed Outlook: Growth Slowing, Volatility Rising
The bottom line is the IMF report follows what is a strong consensus that the U.S. economy is still growing, but that pace of growth is slowing and there are downside risks.
We should always expect market volatility, but even more so as the direction of the economy becomes more uncertain. Mixed economic data will drive the market up or down on a daily basis, but that shouldn’t frighten us. It’s the price we pay for long-term growth.
Stay Invested: Long-Term Discipline Wins
Your equity investments should always be positioned for the long-term. Trying to time the market to sweep all your gains before the next bear market is a fool’s errand. History shows us that staying invested improves return over the long term.
If you are nearing or in retirement, it’s key to stick to your plan. Your strategy for income should include a diversified portfolio that takes current income from conservative investments, while staying invested in equities for future income.
Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.
