(Bloomberg) -- Bank of America Corp (NYSE:BAC). cut forecasts for global economic growth this year and next, blaming the uncertainty wrought by the trade war between the U.S. and China.
Economists led by Ethan Harris now expect the world economy to grow 3.3% both this year and next, down from previous estimates of 3.6% and 3.7% respectively.
“The drop in growth is across the board,” the economists wrote in a report on Friday. “We are assuming a big policy response to the ongoing weakness.”
Bank of America now expects easier monetary policy than previously predicted in 26 of the central banks it monitors, including the U.S. Federal Reserve, which it forecasts to cut its benchmark by 75 basis points over the course of this year.
“Growth and inflation headwinds are going to be with us for a while, forcing central banks to use up ammunition they had hoped to have to deal with the next recession,” said Harris and his team.