September 23, 2025
Article from The Wall Street Journal by Paul Hannon
Article Synopsis
The OECD raised its 2025 growth outlook slightly, projecting the U.S. economy to expand 1.8% this year before slowing to 1.5% in 2026 as rising tariffs increasingly weigh on activity. Global growth is forecast at 3.2% in 2025, easing to 2.9% in 2026. While recent resilience has supported momentum, higher tariffs—now at their steepest U.S. level since 1933—are expected to push inflation back up to 3% by 2026 and dampen demand as firms exhaust inventories and buffers.
The OECD sees downside risks from further tariff hikes, renewed inflation, or market shocks, and expects the Fed to deliver additional rate cuts to counter labor-market weakness. It also warned that high debt levels in advanced economies, including the U.S., could limit governments’ ability to respond effectively to future shocks.
