Overview
- The Commerce Department revised fourth-quarter 2025 GDP to a 0.7% annualized pace from 1.4%, reflecting lower government spending and softer exports and consumption partly offset by stronger investment.
- Full-year 2025 growth was downgraded to 2.1%, a full percentage point below the prior estimate.
- January data showed personal consumption up 0.4% month over month as the PCE price index eased to 2.8% year over year.
- The Federal Reserve is holding its policy rate at 3.50%–3.75% after three cuts, and traders now expect the first reduction in September.
- President Trump blamed the autumn government shutdown for the slowdown, while the CBO put the growth impact at under one percentage point, and rising fuel prices from new Middle East hostilities pose renewed inflation risk.