“We are seeing more signs of weaker exports and manufacturing from US tariffs, though the hit remains relatively mild so far. German fiscal spending and Chinese policy support should keep the impact of this soft patch contained. As the world grapples with one US-centred economic shock, another looms in the background: the potential loss of Fed independence. Spotlight: A less independent Fed would have implications well beyond US shores, and it could well lead to a resumption of ECB rate cuts. Since our last Global Monthly, we’re seeing further signs of a cooling in export demand from the US on the back of tariffs, although that cooling remains a very gradual one: EU exports to the US, for instance, are only down around -4.7% y/y – a very mild hit considering the frontloading we saw earlier in the year”
Morten W. Langer
