SPYD - Global Economic Outlook: July 2025
2025-07-18 03:20:00 ET
2025 economic predictions: How are we doing?
Having passed the midpoint of the year, several of our key economic predictions for 2025 are on track, including weaker US economic conditions. Multiple factors contributed to our expectation of a US slowdown this year, including the lingering effects of prior monetary tightening and dollar strength, diminished ?scal tailwinds, and higher tariffs. A recession has not been our base case, despite plenty of speculation that one would occur, partly because the accumulations of imbalances and excesses that have led to previous recessions are not evident. Although US real GDP contracted in the ?rst quarter, this partly re?ected an exceptional surge in imports due to tariff front-running. Our tracking estimate for the second quarter points to a rebound, implying very subdued quarter-over-quarter growth in real GDP on average during the ?rst two quarters of 2025. Despite our view that a recession is not the most likely outcome, there are various risks to monitor, including an escalation of trade tensions. The sustained strong rebound in most major equity indexes since mid-April suggests a market assumption that proposed higher US tariffs will not ultimately materialize. That might prove overly optimistic, especially for Section 232 tariffs, importance of energy supply from Gulf producers....
Global Economic Outlook: July 2025