US Economy Proves Stronger-Than-Expected in 2024
The US economy performed better-than-expected in 2024, with the International Monetary Fund (IMF) upgrading its growth forecast for the region, and the resilience may persist in 2025 as the Federal Reserve unwinds its restrictive policy.
IMF World Economic Outlook (October 2024)
According to the IMF, Advanced Economies are projected to grow 3.2% in 2025, with the US expected to expand 2.2%.
Source: IMF
Even though economic activity in the US is anticipated to slow in 2025, the IMF may continue to revise its growth forecast as the Federal Open Market Committee (FOMC) remains ‘committed to maintaining our economy’s strength by supporting maximum employment and returning inflation to our 2 percent goal.’
In turn, the FOMC may further unwind its restrictive policy in an effort to prevent a recession, and the strength in the US economy may carry into 2025 amid the upward revisions in the Atlanta Fed’s GDPNow model.
Atlanta Fed GDPNow Model
Source: Atlanta Fed
According to the model, the ‘estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 3.2 percent on December 18, up from 3.1 percent on December 17.’
In response, the FOMC may continue to adjust the forward guidance for monetary policy as ‘recent indicators suggest economic activity has continued to expand at a solid pace,’ and the central bank may stay on track to implement less rate-cuts in 2025 as ‘the median participant projects that the appropriate level of the federal funds rate will be 3.9% at the end of next year’ instead of the 3.4% forecast at the September meeting.
With that said, the stronger-than-expected US economy may continue to sway the Fed as Chairman Jerome Powell acknowledges that ‘it's pretty clear we have avoided a recession.’
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2025