“The dialing of some of the tougher tariffs issued by the government on China recently will reduce the risk of the U.S. economy falling into a recession this year,” Michael Feroli, chief U.S. economist at JPMorgan Chase, said on Tuesday. “We believe the risk of recession is still rising, but now it’s below 50%.
Feroli said the bank now believes the U.S. economy grew 0.6% in 2025, up from 0.2% before, a key measure of the inflation-based underlying inflation index based on personal consumption expenditure, which does not include food and energy, rose to 3.5% instead of 4%.
at the same time. Goldman Sachs Group and other major banks have raised their growth forecasts for China’s economy, citing temporary agreements with the United States to alleviate their trade conflict. Analysts at ING Groep NV have increased their forecast to 4.7%, which could increase if a deal is concluded in the next few months.
Goldman Sachs expects true GDP in the world’s second-largest economy to grow 4.6% in 2025 from a previous 4% estimate, analysts led by Andrew Tilton wrote in a research note to clients on Tuesday.
“This is a more than expected downgrade, representing an escalation, although negotiations will remain challenging,” Ing China chief economist Lynn Song said on Monday.
