After declining in the first quarter (-0.5%), US economic activity rebounded strongly in the second quarter (+3% in annualised quarterly variation). As in all economies around the world, US GDP growth in the first six months of the year was strongly affected by the trade war.
The contraction in GDP in the 1st quarter can be explained by the explosion in imports of goods (+51.6%), as American companies stockpiled as many goods as possible before the new customs duties came into force.
In the 2nd quarter, goods arrivals on American soil collapsed (-35.3%), which statistically helped the GDP growth figure after having penalised it at the beginning of the year.
Household consumption is the answer
It is therefore necessary to analyse the non-trade figures to get a correct picture of the US economy. It still appears to be expanding resolutely thanks to household consumption (+1.4% in the 2nd quarter).
However, this is half as dynamic as last year (+2.8%), which heralds a sharp slowdown in GDP growth in 2025, to only 1.8% according to our latest forecasts, compared to 2.8% in 2024.
Household consumption, and therefore GDP growth, will be even lower in 2025 compared to last year as inflation has risen again with the trade war, to 2.7% in June from 2.3% two months earlier.
Divisions not seen in Fed since 1993
And with the sharp depreciation of the dollar in recent months and the introduction of new tariffs that will increase the price of imports, inflationary pressures are likely to strengthen further in the coming months.
These fears explain the new monetary status quo decided by the Federal Reserve on 30 July. It should be noted that two members of the monetary committee, both appointed by Donald Trump, who is clamouring for a sharp cut in interest rates, voted for a reduction in the key rate, which has been between 4.25% and 4.50% since the end of 2024.
This is the first time since 1993 that two members have opposed a Fed decision, where consensus is usually the order of the day.
The next Fed meeting is scheduled for September. The monetary decision will depend on the evolution of inflation, but also on the health of the US economy, both of which are uncertain because of the trade war.
Stocks follow American companies
Overall, the GDP figures and the Fed's decision had no impact on the US stock market, which mainly moved according to the results published by major American companies.
On the other hand, the Fed's cautious rhetoric reduced the probability of a cut in the US key rate, which supported the value of the dollar, which rose to $1.14 to the euro.
Beyond the current slowdown in the economy, US assets are indispensable in a properly diversified portfolio. Buy 5%, 15% or 25% US equities in a defensive, balanced or dynamic portfolio. Dollar bonds are also attractive.
See below our suggested portfolio:
