Weak USA GDP (-0.5%) but rate cuts probability down to 20% from 24%

Why?

-Atlanta fed latest GDP estimate is at 3.4% June 18 2025 in anticipation for the rumored Q2 rebound of 3% due to reduced import distortions.

- Deloitte’s US Economic Forecast for Q2 2025 projects a slowdown in trade growth due to tariffs but notes an upside scenario where productivity-enhancing technologies, tax cuts, and deregulation could drive real GDP to 2.9% in 2025

- S&P Global Ratings forecasts annual GDP growth of 1.9% for 2025.

What the Market expects to happen to remain bullish;

- The Fed’s signaled two 25-bps rate cuts in 2025 (likely Q3–Q4) and potential SLR easing could boost lending and investment, supporting 3% growth