Macro hot spots: a mid-year review

The US president sets deadlines. Then he postpones them when he realises the objective is out of reach or personally damaging. The tariff question was initially supposed to be clarified on 2 April, but we now have to wait until 9 July. A further delay is possible. The same applies to the vote on the tax cut plan in the US and the resolution of wars (Ukraine, Middle East). The good news is that these postponements and U-turns aim to avoid the worst, namely a recession, but all this zig-zagging could end up derailing the economy. So far, there is no sign of this. In Q1, the world economy was not far off its growth trajectory in recent years. In Q2, the inflationary impact of tariffs was negligible. As such, nothing is yet irreparable. But the strong and clear message conveyed by businesses and households is that the ambient uncertainty is weighing on their decisions: they foresee fewer hirings and investment and are concerned about inflation. If Trump had not thrown the global economy into such turmoil, the Fed would have already cut its policy rates this year. The ECB might not have trimmed its rates so rapidly. Central banks are giving themselves until after the summer to gain a clearer picture.