US economy to avoid recession in 2025 — BofA forecast

Bank of America (BofA) predicts the US economy will avoid a recession in 2025, with the Federal Reserve (Fed) maintaining current interest rates. Despite market expectations of potential rate cuts, robust consumer spending and persistent goods inflation demonstrate the economy's continued strength.

Recent data supports this outlook. June retail sales rose 0.5% month-over-month, while food services increased by 0.6%. BofA cautions that rate cuts motivated by political considerations, such as financing government deficits, would be ill-advised, potentially destabilizing markets through dollar weakness, heightened inflation expectations, and increased credit risks.

Upcoming economic indicators, including jobless claims and durable goods orders, will provide further insights. However, BofA expects the Fed to maintain its current stance barring significant changes in economic conditions.