ING economists warn that President Donald Trump's latest wave of unpredictable trade policies is fuelling global economic uncertainty, weakening confidence, and triggering volatility across financial markets.
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In the latest THINK aloud podcast, ING's senior economists James Knightley, Carsten Brzeski, James Smith and Chris Turner explore the mounting impact of trade tensions on the United States, Europe and the United Kingdom, noting that policymakers face increasingly complex conditions.
'The Trump administration appears to be powering through on its promise to impose sweeping tariff measures despite recent court rulings contesting their legality, but the form they're set to take remains deeply unclear,' the team stated.
This ambiguity, according to ING, is already weighing on sentiment: 'What we do know is that the uncertainty is taking a toll on consumer and business sentiment, fuelling market volatility, and complicating the work of central bankers.'
James Knightley, Chief International Economist for the US, expects economic activity to slow, but stops short of forecasting a downturn. 'I expect a weaker growth environment in the US this year, but am not yet convinced of a recession,' he said.
Carsten Brzeski, Global Head of Macro, sees a similar pattern in Europe: 'Uncertainty lingers at record highs,' he noted, adding that both US and eurozone economies are likely to see 'more rate cuts this year' as central banks respond.
In the UK, Developed Markets Economist James Smith downplayed the importance of a US trade deal. 'A trade deal with the US is less important than deepening ties with the EU,' he said, adding that the Bank of England is expected to ease policy further following last month's quarter-point cut.
On the currency front, Chris Turner, Global Head of Markets, sees the dollar under pressure: 'The euro should benefit from disillusionment with the dollar,' he explained. However, Turner warned that Europe's fragmented financial markets continue to hamper progress: 'Deeper integration is sorely needed.'
Listeners are encouraged to tune in to the full discussion via the THINK aloud podcast, a replay of ING's recent live webinar, available on major platforms including Spotify.
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