From Financial Modeling Prep: 2025-01-02 01:49:10

Goldman Sachs economists project 2.4% GDP growth in 2025, surpassing the 2.0% consensus. Factors include strong private demand, AI-driven investments, and federal incentives like the IRA. Consumer spending is expected to rise by 2.3% due to income gains, a stable labor market, and wealth effects from equity markets. Unemployment is forecasted to stabilize at 4% by year-end 2025, supported by slowing immigrant labor supply and demand growth. Core PCE inflation may decrease to 2.1% by 2025, driven by easing wage pressures. The Federal Reserve is expected to implement three rate cuts in 2025, reflecting confidence in inflation control. Goldman predicts an increase in the Fed’s neutral rate estimate to 3.25% or higher, influenced by demand-side factors. Speculation about a potential shake-up at the Federal Reserve is deemed unlikely by Goldman, citing legal constraints. Sectoral implications for 2025 include AI-driven innovation boosting renewable energy and digital infrastructure, consumer spending growth benefiting retail and financial services, and lower interest rates stimulating housing demand. Investors are advised to closely monitor these trends for opportunities and challenges in 2025.



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