Before US President Donald Trump launched his war of choice against Iran, financial markets were booming in many countries, and private-sector confidence was recovering. But the outlook has suddenly become bleaker, and many governments have only limited policy buffers available to cushion the inflationary shock.
ITHACA—Before Donald Trump launched his war of choice on Iran, the world economy was poised for a year of decent growth despite structural headwinds resulting from trade-policy volatility, rising public debt levels, and geopolitical fragmentation. The latest update to the Brookings-FT TIGER (Tracking Indexes for Global Economic Recovery) shows that financial markets were booming in many countries, and that private-sector confidence was recovering. Moreover, the US Supreme Court’s ruling against Trump’s “Liberation Day” tariffs was a positive omen for world trade, even if it did not ensure a predictable path forward.
ITHACA—Before Donald Trump launched his war of choice on Iran, the world economy was poised for a year of decent growth despite structural headwinds resulting from trade-policy volatility, rising public debt levels, and geopolitical fragmentation. The latest update to the Brookings-FT TIGER (Tracking Indexes for Global Economic Recovery) shows that financial markets were booming in many countries, and that private-sector confidence was recovering. Moreover, the US Supreme Court’s ruling against Trump’s “Liberation Day” tariffs was a positive omen for world trade, even if it did not ensure a predictable path forward.