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Policy uncertainty reshapes the April 2025 US forecast, which incorporates a shallow recession in the second half of that year. Annual growth is projected at 1.4 percent in 2025 and 0.8 percent in 2026. Tariffs raise expected inflation even as labor conditions soften, making anticipated Federal Reserve cuts conditional on a later inflation peak and persistent economic weakness.
Read the workMarch brought $17.1 billion in net portfolio outflows from emerging markets according to the April tracker. Equity withdrawals accounted for most of the retreat, with debt also losing funds. China drove the largest share of the reversal, while debt flows to other emerging markets remained only slightly positive.
Read the workEfforts to weaken the dollar confront the enduring appeal of US assets. This analysis links persistent fiscal deficits, foreign investment and currency strength, arguing that tariffs can redirect trade without resolving the overall external imbalance. Currency intervention alone cannot address a problem rooted partly in fiscal policy and global demand for Treasuries.
Read the workThe April 2, 2025 tariff announcement marks a major change in US trade policy. This initial assessment examines a universal 10 percent tariff combined with additional country rates and a broad policy reach. Falling equity futures, rising gold and currency repricing illustrate how markets immediately responded to greater expected trade friction.
Read the workEurope’s defense spending ambitions create different fiscal challenges across its largest economies. Germany expands military and infrastructure investment, while France and Italy face heavier debt constraints. Spain has more flexibility but competing social priorities. The March 2025 analysis examines how additional borrowing could raise financing costs and test fiscal stability.
Read the workFortun argues that losses at state enterprises deepen Bolivia’s fiscal financing gap, while declining gas exports, scarce reserves and informality limit its adjustment options. He contrasts these constraints with Argentina’s and examines the political obstacles to fiscal reform.
View detailsAmerica’s fiscal challenge extends beyond annual budget negotiations. Rising entitlement costs and interest payments put debt on an increasingly difficult path. The March 2025 analysis estimates that stabilizing the debt ratio requires tax increases or spending reductions exceeding 2.5 percent of GDP. Balancing the budget would demand a substantially larger adjustment.
Read the workFebruary’s $15.9 billion in emerging market portfolio inflows were supported by debt investment, while equities recorded net withdrawals overall. The March tracker nevertheless reports $11.2 billion entering Chinese equities. That contrast shows how positive demand for one market can coexist with a weaker aggregate picture for the asset class.
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