The world economy faces a possible slowdown during late 2025 according to top investment banks because of rising tariffs and intensifying geopolitical tensions. Goldman Sachs together with JPMorgan and Morgan Stanley forecast U.S. GDP will expand between 1% and 2% throughout this year while the risks of economic growth decline in the following year.
The inflationary pressures will increase because of rising tariffs yet the labor market will weaken enough to stop a wage-price spiral from occurring. The current economic situation leads analysts to predict that central banks will maintain their current stance until they receive definitive signs to modify their policies.
The U.S. economy shows short-term strength yet rising uncertainties have led brokerages to project reduced growth for the latter half of 2025. The Federal Reserve maintains its neutral stance because it needs to evaluate how international disturbances affect both inflation rates and employment numbers.
