- J.P. Morgan economists slash their outlook for second-quarter growth to just 1% from a previous 2.25%.
- The economists also change their view that the Fed’s next move was an interest rate hike, and now believe it has an equal chance of cutting or raising rates.
- The two threats to U.S. growth are global economic developments and the uncertainty of the trade war impacting business sentiment and activity.
J.P. Morgan economists said they now see much slower second-quarter growth of just 1%, down from their prior forecast of 2.25% and way off the 3.2% reported in the first quarter.
“The April durable goods report was bad, particularly the details relating to capital goods orders and shipments. Coming on the heels of last week’s crummy April retail sales report, it suggests second quarter activity growth is sharply downshifting from the first quarter pace, ” the economists wrote.
The Atlanta Fed’s GDP Now tracker has GDP growth for the first quarter at 1.3% for the quarter.
The J.P. Morgan economists also changed their view on the Fed, and now do not expect the next move to be an interest rate hike.