Three weeks after US President Donald Trump effectively declared a trade war with the whole world, new economic forecasts and surveys will point to the initial fallout.
A few blocks from the White House, the International Monetary Fund is set to lower its outlook for economic growth in new projections released on Tuesday.
Uncertainty About Trade Policy Soars
Bloomberg Economics index is near an all-time high
The following day, purchasing manager indexes from Japan to Europe to the US will offer the first coordinated glimpse of manufacturing and services activity since Trump’s global tariffs — now partly on hold — were unleashed on April 2. Business surveys from major economies are also on the calendar.
The combined picture is set to offer finance ministers and central bankers assembled in Washington a chance to make initial damage assessments on Trump’s attempt to rewire the global trade system.
“Our new growth projections will include notable markdowns, but not recession,” IMF Managing Director Kristalina Georgieva said on Thursday. “We will also see markups to the inflation forecasts for some countries. We will caution that protracted high uncertainty raises the risk of financial-market stress.”
What Bloomberg Economics Says:
“The IMF’s projections tend to skew optimistic during potentially disruptive crises. In the four large crises we studied, the fund’s initial assessment of the immediate impact on global growth understated it by 0.5 percentage points. However much the IMF may downgrade the growth forecasts to start, history suggests the ultimate blow will be worse.” —Alex Isakov and Adriana Dupita. For full analysis, click here
Those clouds shrouding the global economy are unlikely to lift for a while. Federal Reserve Chair Jerome Powell said on Wednesday that the US central bank is is “well positioned to wait for greater clarity” before considering changes to monetary policy, while European Central Bank chief Christine Lagarde couldn’t say whether uncertainty has peaked.
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