In the past month, the USA economy has experienced a narrative shift.

After two years of performing better than expected, it now seems that the growth of the USA economy will be slower than many on Wall Street had anticipated at the beginning of 2025. However, while the economy is cooling down, it is not crashing.

Federal Reserve Chairman Powell stated at the recent press conference on March 19: "Economic growth appears to have slowed, consumer spending has also tapered, but the pace remains stable."

Last week, the Federal Reserve lowered its GDP forecast for 2025 to 1.7% in its latest Summary of Economic Projections (SEP), after which Powell described the economy as "seemingly healthy." This is a decrease from the 2.1% predicted by the Fed last December.

Economists across Wall Street have made similar revisions to their full-year GDP forecasts, based on the expectation that President Trump's tariff policies will exert pressure on business activity. JPMorgan currently predicts that the USA economy will grow by 1.6% this year, down from a previous prediction of 1.9%. Morgan Stanley now forecasts 1.5%, down from an earlier 1.9%. Goldman Sachs estimates 1.7%, down from an earlier 2.4%.

It is noteworthy that these revisions do not call for a direct economic downturn or a rapid slowdown in economic growth. For example, in March of this year, Goldman Sachs raised the probability of an economic recession in the next 12 months from a previously forecasted 15% to 20%. Given that the likelihood of a recession occurring in the next 12 months is typically around 15% at any given point in history, raising it to 20% does not imply that this is the most likely outcome.

Powell stated: "If you go back two months, people said the likelihood of a recession was extremely low, so it has risen, but not high."

Powell's assessment of the USA's economic outlook is consistent with many forecasters, but it is more optimistic than other data points. The popular Gambling market Kalshi currently estimates a 40% likelihood of an economic recession next year, which is about double the prediction made in mid-February. The Atlanta Fed's GDPNow tool has recently made headlines, currently predicting a nearly 2% decline in first-quarter GDP. Over the past month, due to the uncertainty of policies causing Consumers to be more cautious about the economic outlook, multiple Consumer confidence Indicators have declined significantly.

However, as concerns over tariffs and federal layoffs have become headlines, most of which resonate with the current situation, they do not reflect the reality of the economic status.