KEY TAKEAWAYS
- The U.S. economy is expected to record slower growth in 2025 than this year, according to the latest outlook from the Organisation for Economic Co-operation and Development (OECD).
- However, slowing U.S. GDP growth is expected to “be cushioned by monetary policy easing,” the Paris-based organization said.
- The OECD projects U.S. GDP growth of 2.6% this year and 1.6% in 2025, down from its June forecast of 1.8% growth next year.
- The organization also expects U.S. interest rates to fall by a further 1.5 percentage points by the end of 2025.
The U.S. economy is expected to record slower growth in 2025 than this year, according to the latest outlook from the Organisation for Economic Co-operation and Development (OECD).
However, the slowing growth of U.S. gross domestic product (GDP) “from its recent rapid pace” is expected to “be cushioned by monetary policy easing,” the Paris-based organization said.
The OECD projects U.S. GDP growth of 2.6% this year and 1.6% in 2025, down from its June forecast of 1.8% growth next year.
OECD Sees US Interest Rates Falling By 1.5 Percentage Points By End of 2025
Policy interest rates are expected to fall by a further 1.5 percentage points in the U.S. by the end of 2025, the OECD said, bringing rates toward “neutral levels.” The Federal Reserve last week cut its key interest rate for the first time in four years as it put its focus on preserving the job market and away from fighting inflation.
U.S. GDP grew at an annualized rate of 2.8% in the second quarter, double the 1.4% rate of the first quarter, the Bureau of Economic Analysis said in July.