Despite the lower recession risk, large long-run impact from tariffs remains. Economic growth is slowing as 2025 begins, with US real GDP decreasing 0.2% in Q1 2025, on trend in year-over-year terms. Unemployment is expected to increase to 4.3% in 2025, while inflation remains stubborn but continues its gradual decline.

As trade policy evolves, our analysts assess the likelihood of tariff hikes and their long-term impact on US GDP. If reductions are implemented, we anticipate these measures gradually as ill economic effects begin to manifest.

The Morningstar Q2 Economic Outlook delivers updated forecasts on:

• Tariffs
• Inflation
• Interest rates
• Consumer spending
• Labor market & GDP
• AI & real estate investment

Download the report to explore our latest insights and position your clients for success.