A highly anticipated fiscal package from Congress, largely aimed at extending existing tax cuts rather than introducing significant new spending, will arrive too late and provide too modest a stimulus to counter the near-term drag on economic growth caused by recent tariff increases, according to a new Goldman Sachs analysis.
In their latest assessment, Goldman's Alec Phillips and team outlined expectations that congressional Republicans will finalize fiscal legislation sometime between late July and September 2025. However, the economic benefits of this package will primarily materialize after tariffs have begun negatively affecting U.S. growth. The economists expect the tariffs to subtract between 1% and 1.5% from U.S. gross domestic product (GDP) growth by late 2025 - far outweighing the anticipated modest boost from fiscal policy measures.
