Investment Rating - The report indicates a cautious outlook on global economic growth, with a projected downshift in GDP growth to 1.4% annualized rate in the second half of 2025, the slowest pace in over three years [2][3]. Core Insights - Global GDP growth is expected to slow significantly, influenced by various factors including trade tensions, labor market softening, and geopolitical risks, particularly in the Middle East [3][11]. - The report highlights a potential recession risk, with a 40% probability of a US/global economic recession due to household purchasing power pressures and business sector retrenchment [3][15]. - Inflation dynamics are shifting, with US core CPI inflation anticipated to accelerate towards a 4% year-over-year pace, while Euro area inflation is expected to drop to 2% [2][11]. - The report emphasizes the importance of monitoring global services PMI and business expectations as indicators of economic resilience [14]. Summary by Sections Global Economic Outlook - Global GDP growth is projected to be 2.3% in 2025, with a significant slowdown anticipated in the second half of the year [33]. - The report notes a 0.7 percentage point reduction in global GDP growth due to rising oil prices and geopolitical tensions [17]. Trade and Tariffs - The impact of tariff-related growth impulses is being felt, particularly in the global goods sector, with a noted decline in manufacturing output and softening goods demand [4][11]. - The report discusses the limited pass-through of tariff hikes to US inflation, suggesting that firms are currently absorbing the costs [12]. Regional Insights - In Asia, the report indicates that while some countries are experiencing growth, the overall sentiment is cautious due to trade policy uncertainties and potential impacts from rising oil prices [29]. - The report highlights that China is expected to see a moderation in growth, with a revised GDP forecast of 3.5% annualized rate for Q2 2025 [28]. Central Bank Policies - The Federal Reserve is expected to respond to labor market weaknesses with cautious easing, while other central banks, such as those in Scandinavia, are also leaning towards easing monetary policy [19][20]. - The report anticipates that the Bank of Japan will continue its quantitative tightening, with a focus on reducing its holdings of government bonds [23].