Global Macro Perspectives

The report analyzes the impact of the Iran conflict on the global economy, noting that while inflation is rising, strong AI-led investment limits recessionary risks. Policy paths are diverging, with the ECB expected to tighten while the Fed remains cautious.

Key Takeaways

• 1.The Iran conflict (Hormuz shock) is the primary driver of macro uncertainty, triggering inflation concerns and causing a slowdown in global growth expectations, though a full recession remains unlikely.
• 2.AI infrastructure spending is acting as a major growth tailwind for the U.S. and Emerging Asia, helping to offset broader non-tech investment weakness.
• 3.Central bank policy is diverging; European central banks are expected to hike rates due to inflation pressures, while the U.S. Fed is less likely to alter its stance due to cooling labor demand.

Table of Contents

• Mid-year outlook: Growing through uncertainty
• Key developments
• Growth Outlook
• Inflation and FX Outlook
• About us

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