US real GDP growth has fallen to 2.2%
|Developments since our August Monthly Economic Outlook
Our forecast for 2019 U.S. real GDP growth has fallen to 2.2%. The U.S. economy is showing clear signs of slowing, and while we believe economic growth is still far from entering negative territory, we only anticipate growth of about 1.5% over the next couple quarters. The consumer remains the key source of strength amid continued weakness in business fixed investment.
Our forecast for the fed funds rate has changed. In addition to the 25 bps cut we already had penciled in for September, we have added two more 25 bps cuts, in Q4-2019 and Q1-2020. The Fed seems intent on taking action to forestall a recession and return inflation to 2%, and as such we anticipate more easing in the absence of a major breakthrough on U.S.-China trade relations. Our 2019 year-end forecast for the 10-year Treasury yield is now 1.70%. For 2020, our year-end forecast is 2.05%.
Our initial forecast for 2021 sees real GDP growth in the United States of 2.0%, a fed funds rate that remains unchanged at 1.25%-1.50% and global real GDP growth of 3.2%. More complete 2021 forecasts can be found on slide 11.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.