The latest data suggest that global industry has been resilient to tariffs so far this year. But global trade softened in May and the latest surveys point to further weakness to come. Consumer spending remains subdued in most advanced economies. And although consumer confidence has improved since Liberation Day tariff lows in April, it remains soft. Meanwhile, China’s economy lost some momentum in Q2, and faces various headwinds including from a property sector downturn. Altogether, the latest data chime with our view that 2025 will be a year of slightly-below-trend global GDP growth of a touch below 3%. Weak activity and looser labour markets in some economies should weigh on inflation. So, the global monetary policy easing cycle should continue in the coming months. But tariff-induced inflation concerns will keep the Fed on hold for the remainder of this year.
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