Currency Economics Emerging Markets Outlook Trade Wars Fixed Income Commentary

Global Macro Outlook: Third Quarter 2025

03 July 2025
1 min read
Global Macro Outlook: Third Quarter 2025

What You Need to Know

Shifting US tariff policies during the quarter have left the global trading regime uncertain and the economic outlook somewhat deteriorated. Still, markets ended the quarter about where they began, albeit after a volatile period in between. We’re forecasting growth heading upward in 2026, after slowing later this year.

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Key Forecast Trends

  • There’s relative calm in the financial markets, which we think are waiting for more information about the impacts of trade wars and geopolitical risks on the global economy.
  • Early signs point to deteriorating consumer and business confidence due to tariffs, with reduced spending and investment activity likely to follow.
  • As growth slows, central banks should continue to ease policy, with the Fed likely lowering rates by year end.
  • The dollar’s sharp depreciation suggests that trade policy is only part of the changing environment, although our base case remains that the dollar will continue to be the world’s reserve currency of choice.
  • A challenging environment lies ahead, but it should present opportunities alongside the risks for investors who can look past the headlines.
Global Macro Outlook: The Next Six Months

Global Forecast

Forecast Overview

The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams, and are subject to change over time.

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