Economic growth is ‘moderating.’ But data doesn’t show clear signs of a looming recession.

The US economy is experiencing a slowdown in growth, with the Federal Reserve lowering its GDP projection for 2025 to 1.7%. Despite this, forecasts from Wall Street banks do not predict a recession or rapid economic decline. While data points such as consumer sentiment and confidence measures have declined, they may not accurately reflect the economy’s actual position. Recent reports show a rebound in economic activity, with the S&P Global composite PMI for March surpassing expectations. The stock market may be impacted by slowing economic growth, but current signs suggest a normal adjustment rather than a significant downturn. Deutsche Bank’s senior US economist believes that while consumer spending has cooled after a period of strong growth, the labor market dynamics and income growth are still supportive of consumption. The key question for investors is whether economic forecasts will continue to decline and further impact stocks.

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