According to the Financial Association on December 31 (editor Xiaoxiang), after the results of the USA elections were announced in November this year, the news of Trump's re-election as USA president quickly ignited enthusiasm in the American Financial market.

Investors are optimistic about the next government's prospects for lowering taxes and reducing regulations, believing this will help unleash corporate vitality and promote economic growth. However, many have also expressed concerns about potential risk factors, such as tariff increases that could exacerbate international trade frictions and immigration policies that might affect labor market stability.

As the new year approaches, Goldman Sachs chief economist Jan Hatzius and his colleagues Alec Phillips and David Mericle have outlined ten specific questions and answers regarding key themes that may affect the market in 2025.

Hatzius and his analyst team claim that their report titled 'USA Economic Analysis: 10 Questions for 2025' addresses the most critical issues and answers that clients need to prepare for the new year, especially in the Trump 2.0 era—whose policies are bound to differ significantly from those of the Biden-Harris administration.

The report covers themes ranging from economic growth and labor market trends to Federal Reserve policies and Trump's economic and immigration agenda. Goldman Sachs Analysts emphasize that as the new year approaches, the fundamentals of the USA economy are expected to remain robust, but they caution that uncertainties surrounding policy changes and geopolitical risks during Trump's second term may impact the outlook.

Here are the ten key questions raised by Goldman Sachs Analysts, along with their current answers:

①Will the USA's GDP growth rate exceed consensus expectations next year?

Goldman Sachs: Yes

Analysts at Goldman Sachs expect the GDP growth rate in the USA for the fourth quarter of 2025 to be 2.4%, higher than the consensus expectation of 2%, mainly driven by strong Consumer spending, robust real income growth, and healthy business investment.

Will the growth of Consumer spending in the USA exceed consensus expectations?

Goldman Sachs: Yes

Analysts at Goldman Sachs expect Consumer spending in the USA to grow by 2.3% in 2025, consistent with previous trends. Key drivers include a healthy labor market and wealth effects. These factors are expected to remain robust in 2025.

Will the labor market in the USA continue to be weak?

Goldman Sachs: NO

Analysts at Goldman Sachs emphasize that although the labor market in the USA is slightly weaker than previous years, it remains strong by historical and international standards.

Will the core PCE inflation rate, excluding the impact of tariffs, be below 2.4%?

Goldman Sachs: YES

Goldman Sachs analysts expect that by the end of 2025, the inflation rate in the USA will continue to decline towards the Federal Reserve's 2% target, with the core PCE price, excluding the impact of tariffs, expected to drop to 2.1%. When including tariffs, the inflation rate might be around 2.4%. They point out that easing wage pressures, a relief in catch-up inflation, and stability in financial services are the main drivers of this outlook.

Will the Federal Reserve lower interest rates by at least 50 basis points again?

Goldman Sachs: YES

Goldman Sachs analysts expect the Federal Reserve to push for three rate cuts in 2025, likely in March, June, and September.

Will the median expectation of the neutral interest rate from the FOMC rise from 3% to at least 3.25%?

Goldman Sachs: YES

Goldman Sachs analysts expect the Federal Open Market Committee in the USA to continue raising expectations for the neutral interest rate in 2025.

Will President-elect Trump attempt to fire Federal Reserve Chairman Powell or demote him.

Goldman Sachs: NO

Despite potential tensions between Trump and the Federal Reserve, Goldman Sachs analysts predict that President-elect Trump will not attempt to remove Federal Reserve Chairman Powell from office.

Will net immigration in the USA turn negative?

Goldman Sachs: NO

However, Goldman Sachs Analysts expect that the net number of immigrants will decline to about 0.75 million people per year, all consisting of authorized legal immigrants, while the number of illegal immigrants may remain largely unchanged, as the number of deported immigrants offsets the inflow.

Will the White House impose universal tariffs?

Goldman Sachs: NO

Goldman Sachs Analysts expect that President Trump will raise tariffs on imports of China Commodity and Autos, but they believe that the likelihood of imposing tariffs on all imported goods is low.

Will Congress be able to significantly reduce the deficit?

Goldman Sachs: NO

Goldman Sachs Analysts expect that there will not be meaningful deficit reduction in the near future...

Editor/Rocky