Fitch Raises U.S. GDP Growth Forecast for 2025 and 2026
According to Fitch Ratings, stronger economic momentum has led to higher U.S. growth forecasts, alongside updated inflation projections and expectations for two Federal Reserve rate cuts in early 2026 that would lower the federal funds rate.
Summary
Fitch Ratings raised its U.S. GDP growth forecast to 2.1% for 2025, up from 1.8%, and projected 2.0% growth in 2026. The agency expects inflation to reach 3.0% in December 2025 and rise to 3.2% by the end of 2026. Fitch also anticipates two Federal Reserve interest rate cuts in the first half of 2026, which would reduce the upper federal funds rate to 3.25%.
Terms & Concepts
- GDP (Gross Domestic Product): A measure of a country’s total economic output, used to assess overall economic growth and performance.
- Federal Funds Rate: The benchmark interest rate set by the U.S. Federal Reserve that influences borrowing costs and overall financial conditions.
- Fitch Ratings: A global credit rating agency that provides economic forecasts and evaluates the financial stability of governments and institutions.