Global Data Pod Global Data Pod Weekender: Threat assessment
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May 9, 2025 The podcast delves into the resilient growth of the global economy in early 2023, despite lingering recession fears. It highlights the impact of trade tariffs on consumer sentiment and the complex interplay of financial indicators. Discussions reveal how companies are adapting their pricing strategies in response to market shocks. The balancing act faced by the Federal Reserve in addressing inflation while promoting employment is explored. Lastly, insights into consumer spending trends underline a disconnect between consistent spending and declining sentiment.
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Strong Data Masks Underlying Risks
- Despite strong growth data in early 2025, front-loading due to tariffs implies a drag on future growth.
- Various risks from trade wars and sharply falling sentiment still point toward a 60% recession chance.
Sentiment Shock vs Purchasing Power
- Sentiment shocks are broad and building, especially in manufacturing and consumer sectors globally.
- The potential purchasing power squeeze remains uncertain, complicating recession severity forecasts.
Delayed Purchasing Power Squeeze
- Delays in the expected purchasing power shock and tariffs' impact postpone economic pain.
- Delays can change recession dynamics, potentially smoothing the shock over a longer time.