Global growth may have peaked in Q1

The weakness of some recent economic data and business surveys has raised concerns that the global expansion is running out of steam. But we estimate that world GDP growth picked up a bit in the first quarter, closing the gap with overly-positive survey data. While this may mark the peak in global growth, we do not anticipate the world economy slowing much until next year, when the US economy begins to falter. In the meantime, we expect the Fed and the Bank of England to press on with three more rate hikes this year, while the ECB and BoJ will be in no rush to follow. Admittedly, a significant escalation of trade tensions between the US and China poses a key risk to the global outlook. But for now, we think that there is time for the two sides to strike a deal to avoid an all-out trade war.