US President Donald Trump has expressed a steadfast outlook toward the stock market, prioritizing his long-term economic goals over Wall Street’s whims. However, recent economic data releases and forecasts paint a worrying picture.
Economic teams have lowered their 2025 GDP expectations, with Morgan Stanley now predicting 1.5% growth, down from 1.9%, while Goldman Sachs has dropped its expectations to 1.7%. This downward trend is caused by various factors, including tariffs, deregulation, and lower energy prices.
Critics argue that the stock market’s volatility and trends often favor a select group of investment bankers over regular people’s retirement accounts. Moreover, if most Americans believed Trump’s long-term growth plans would lead to positive economic outcomes, the stock market would likely rise instead of fall.
Mohamed El-Erian, president at Queens College, Cambridge, notes that “the pain is worth the gain down the road.” However, experts warn that if GDP growth slows to a stall speed of 1% or below, even the benefits of a more efficient economy may not be sufficient to outweigh the costs.
The upcoming release of February’s Consumer Price Index (CPI) on Wednesday will provide further insight into the impacts of tariffs and the threat of stagflation. With inflation adding to the economic uncertainty, investors should closely monitor these indicators to inform their decisions.
Source: https://finance.yahoo.com/news/the-gdp-warnings-are-adding-up-morning-brief-100046388.html