Global Economic Weekly The Art Of Delaying Deals

The report analyzes the economic implications of a potential US-Iran deal and the sustainability of the current 'K-shaped' growth dynamics driven by AI hype and loose financial conditions. It highlights that while markets are optimistic, underlying inflation imbalances and low energy inventories pose significant risks.

Key Takeaways

• 1.Markets are pricing in a temporary US-Iran deal, which could trigger a short-term rally in risk assets but remains fragile due to regional tensions and low energy inventories.
• 2.The Taylor Rule suggests US monetary policy is approximately 100bp too easy, though this gap vanishes when excluding tariff impacts.
• 3.China is pivoting its infrastructure strategy toward 'six networks' (water, power, computing, etc.) to drive growth, shifting funding away from local governments to central SOEs and policy banks.

Table of Contents

• Global Letter: The art of delaying deals
• US: Tinker Taylor, Labor, Supply
• Euro area: Second-round effects, so far so good
• China: 'Six networks' to drive an investment upswing
• Emerging EMEA: Türkiye – navigating domestic uncertainty
• Latin America: Decisive electoral season
• Key forecasts
• Detailed forecasts
• Research Analysts

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