103 economists polled by Reuters now expect a 35% median probability of a recession over the next 12 months, down from 45% in April. The odds declined after the U.S. and China agreed to temporarily slash tariffs on each other.
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The same economists unanimously believe that President Trump’s policies have “hurt” the economy while over 55% believe that they have “significantly hurt” the economy.
Reuters Poll Calls for 3.1% Inflation in 2025
The poll also found that consumer price index (CPI) inflation is expected to be 3.1% in 2025, falling from the 3.2% estimate last month. For 2026, CPI is expected at 2.8%, down from 2.9% in April. Both estimates are still well above the Fed’s goal of 2% inflation.
By the end of the year, 74 of the economists expect the minimum federal funds rate to be between 3.75% and 4.00% compared to the current rate of between 4.25% and 4.50%. The rate is highly dependent on inflation and is less likely to fall if inflation is elevated.
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