Tariff policy is negatively impacting the US economy, with Morgan Stanley and Goldman simultaneously lowering their growth expectations.

Zhitong Finance APP noted that both Morgan Stanley and Goldman cut their growth expectations for the US and blamed the tariff policy. Morgan Stanley reduced its growth expectation for the US to 1.5% in 2025 from 1.9% and to 1.2% in 2026 from 1.3%. The bank believes that the tariff policy will slow economic growth this year and push up inflation, putting pressure on the Federal Reserve to control price rises. Morgan Stanley maintains its forecast for the Fed to cut interest rates only once this year, by 25 basis points, likely in June. They also pointed out that the market's expectation of three rate cuts this year is too optimistic. Morgan Stanley added that it expects two more rate cuts from 2026, lower than the market's expectation. Goldman also cut its growth expectation for the US in 2025 to 1.7% from 2.2% and raised the probability of economic recession in the next 12 months to 20% from 15%. They also listed tariff risk as a major reason for the downward revision.