Inflation & Monetary Policy - Central banks have done a good job taming the great inflation of 2022 [1] - The primary concern should be the inflation trajectory, as it dictates the direction of interest rates [3][4] - Current policy is broadly in line with a neutral stance, with analysts suggesting a 7% nominal rate indicates neutral territory [14][15] - Uncertainty about the inflation trajectory persists due to past volatility [15] Inflation Target & Policy Revision - There's an opportunity for "opportunistic disinflation," using a low inflation environment to anchor inflation expectations [5][11] - The current inflation target range is considered too wide and high compared to peers, necessitating a revision [10] - The South African Reserve Bank is undergoing a review, with recommendations to lower the inflation target to 2-3% [6][8] - Lowering the inflation target could lead to lower nominal interest rates [14] Risks & Communication - Geopolitical shocks and policy decisions (tariffs) can impact the economic outlook [2] - Scenarios are useful for policymakers to communicate potential risks and future trajectories, but require careful communication to avoid public misinterpretation [16][17]

Key takeaways from our recent client conversations around the world. June 30, 2025 04:01 AM GMT Global Economic Briefing | North America M Idea The Weekly Worldview: The Hardest Questions: From Beijing to Berlin M A good friend of mine likes to say that the main reason that he forecasts is to find out why he was wrong. Our view of a meaningful deceleration in the US and the global economy from tariffs and other policies has yet to play out. We find ourselves waiting. So, while we wait, we take stock of the ...

Investment Rating - The report maintains a bearish stance on the USD and anticipates the S&P 500 to close near 6,000 by year-end, driven by accelerated earnings growth [10][25]. Core Insights - The interplay of policy uncertainty and business cycle dynamics is crucial, with US trade and fiscal policies being significant drivers of the global business cycle [7][8]. - A substantial shift in US trade policy, with an over 10%-point rise in the effective tariff rate, is expected to generate a broad-based downshift in global growth and a rotation in inflation pressures toward the US [18][45]. - The report places recession risk at an elevated 40%, reflecting concerns around building growth drags and recent declines in global business sentiment [18][54]. Economic Outlook - Global growth is expected to dip to 1.4% in 2H25, down from a potential of 2.2%, marking the weakest performance in over three years [25][52]. - US GDP growth outlook has been lowered from 2.0% to 1.3% for the year, with a one in three chance of slipping into contraction in the coming four quarters [18][59]. - China’s GDP growth forecast stands at 4.8%, reflecting external uncertainties and domestic housing market weaknesses [18]. Market Outlook - The report anticipates a continued rotation into international markets, with USD weakness benefiting international equities [18][21]. - US equities are expected to experience narrow leadership and high market concentration, similar to the 2023-2024 playbook [10][18]. - High-grade credit is viewed positively due to attractive yields, declining net supply, and solid corporate results [10][20]. Commodity Outlook - Oil prices are projected to trade in the low-to-mid $60 range for the remainder of 2025, with a forecasted settlement at $60 in 2026 [24]. - Gold prices are expected to reach an average of $3,675/oz by 4Q25, supported by geopolitical tensions and economic growth concerns [24]. Risk Scenarios - The report outlines three potential scenarios: a higher for longer/incomplete cutting cycle, a sharper slowdown or recession, and a Goldilocks scenario where growth quickly returns to trend [33][35][37]. - The baseline scenario suggests that a moderate macro shock from tariffs could lead to upward pressure on risk assets, while a downside scenario anticipates wider credit spreads and underperformance in low-quality assets [33][35].

Joining us now is Evercore chairman emeritus and black rockck co-founder Ralph Schlaststein right here on set. It's great to have you. Welcome.It's great to be here. Let's start right there. Uh because what what an incredible second quarter we had.Uh tariff tantrum. Is it over. Is is the fear about peak tariffs behind us.Well, I I think you can never say it's completely behind us because I don't think we have a absolutely certain path as to where the president and his team are going to take the tariff discu ...

report. Dom Chu has today's ETF edge for us. Hey, Dom.All right, so Scott, with the markets on track to close out the second quarter at record highs, one fund that's riding the wave also now holds the record just 6 months of the fastest to reach a billion dollars in assets in more than 20 years. But its biggest holdings might not be what you expect. Why.How does it work. Joining us now is a familiar face, Tom Lee, CIO at Fundstrap Global Adviserss to take us inside the Granny Shots ETF. And for a lot of fol ...

Investment Rating - The report does not explicitly provide an investment rating for the industry or sector discussed Core Insights - The Federal Reserve is in a "wait-and-see" mode, with Chair Powell indicating that the economy is "solid" and the policy is moderately restrictive, allowing the Fed to remain patient [1][4] - Inflation is projected to rise to 3.0-3.3% for both headline and core PCE by year-end, influenced by tariffs and a tight labor market [3][8] - The Fed's future actions will depend on economic data, particularly regarding inflation and labor market conditions, with potential interest rate cuts forecasted to begin in March 2026 [3][8] Summary by Sections Economic Outlook - The Fed anticipates that tariffs will increase prices over the summer, aligning with the report's view [1] - Chair Powell noted that the impact of tariffs on inflation could be either short-lived or more persistent, depending on various factors [5][10] Labor Market - Immigration controls are expected to keep labor force growth low, contributing to a tight labor market [3][11] - The Fed is monitoring per-capita economic health due to slowing population growth, which may present a different picture than aggregate data [12] Monetary Policy - The Fed is not expected to make preemptive cuts, with most committee members believing that conditions for cuts will be met by year-end [8] - Chair Powell emphasized the uncertainty surrounding tariff pass-through to consumers and the need for caution in policy adjustments [10]

It does seem as if there are some risk positive stories at the margin. Then you can look at the 899 news from the United States as an example of that. And even some of the weakness in the data at the United States has been fed through into the lower rates narrative.So I suppose from that perspective, the the push higher in stocks makes sense. Is that too much complacency, though, in your view. I'm struggling with this market at the moment.Every input would seem bullish at the margin. As you say, yields are ...

Monetary Policy - The Bank of Thailand's decision to maintain borrowing costs provides a "monetary lifeline" to address various challenges [1] Economic Challenges - Challenges include US tariffs, geopolitical tensions, and domestic politics [1]

June 23, 2025 12:53 AM GMT India Economics – Macro Indicators Chartbook | Asia Pacific Policy Impetus to Bolster Growth Growth indicators exhibit a modest recovery led by domestic demand. Macro stability indicators have improved, increasing flexibility for policy makers. Uncertainty from external conditions continues to weigh on growth, even as India appears better placed on a relative basis. 1) Growth – uneven recovery: High-frequency data in May suggest a mixed trend across indicators, with ones such as G ...

June 23, 2025 06:07 AM GMT Economics, Banks, Macro and Sovereign Credit Strategy | EEMEA CEE Trip Notes | From Politics to Policy | What's Changed | | | | --- | --- | --- | | PKO BP (PKO.WA) | From | To | | Price Target | PLN 80.00 | PLN 91.00 | | Top Pick Added | OTPB.BU | PKO.WA | | OTP Bank (OTPB.BU) | | | | Price Target | HUF 28,700.00 | HUF 32,400.00 | | Top Pick Removed | OTPB.BU | PKO.WA | | Pekao SA (PEO.WA) | | | | Price Target | PLN 176.00 | PLN 209.00 | | | We visited Budapest, Warsaw and Prague ...