Global Macro Insights

In May, tariffs remained a central theme affecting financial markets as investors grappled with their economic implications. Despite the benign inflation outcomes so far, concerns linger about the long-term impact on growth and prices. Central banks in developed markets continued to cautiously adjust their monetary policies, either holding steady or lowering rates modestly. The US dollar experienced a slight decline against various currencies amid fiscal worries, while bond yields rose due to credit rating downgrades.

Looking ahead, tariffs pose significant risks to both growth and inflation trajectories globally. Financial advisors should closely monitor policy changes under the new US administration for potential market impacts and identify countries that may benefit or suffer from tariff shifts. Additionally, geopolitical tensions could further influence economic forecasts and investor sentiment. While global monetary policy is expected to continue its easing trend—except in Japan—tariff-related uncertainties remain a key challenge. Currency valuations suggest opportunities for investors in certain developed and emerging markets where value persists despite recent USD depreciation.