Economic outlook: Higher uncertainty, lower growth

As we reach the midpoint of 2025, uncertainty looms large over the global economic landscape, driven primarily by fluctuating U.S. trade policies and rising tariffs. This unpredictability has resulted in a contraction of U.S. GDP for the first time since 2022, as well as a slowdown in business activities and port traffic worldwide. While recent negotiations between major economies like the U.S., Europe, and China offer some hope for resolution, much remains unsettled.

Market volatility has been pronounced with sharp responses to tariff announcements followed by recovery rallies when tensions eased. Investors remain on edge as central banks tread carefully; while there is pressure to cut rates to counter slowing growth, persistent inflation complicates such moves.

Looking ahead, strategic scenario analyses suggest that outcomes range from prolonged trade conflicts leading to recessionary pressures to potential market rallies if swift agreements are reached. The path forward hinges significantly on international negotiations' outcomes and how quickly new geopolitical orders can be established amidst this backdrop of transformation.