The GIV elaborates on the latest views, convictions and outlook of our Global CIOs, different Investment Platforms and the Amundi Investment Institute.

The fiscal lever returns in an uncertain global order

The ambiguity surrounding US tariffs and their implementation is raising fears among businesses and consumers that could weigh on economic growth over the medium to long term, while having a temporary effect on inflation.

Three hot questions

  1. How do you see the evolution of the US economy amid the tariff backdrop?

  2. Do you think US trade policy will affect Fed’s decisions?

  3. What is the way forward for the USD and the EUR?

Recalibrate and make room for EM

Deteriorating economic data in the US, without a recession, indicates President Trump’s willingness to sacrifice short term US economic growth and that will keep the Fed on the look out for any signs of pain. This is happening at a time when China is showing clear signs of fiscal support and leaders in Europe are realising the need for fiscal push to become self-reliant and build defence and infrastructure capabilities. This doesn’t call for any risk reduction but instead a furthering of rotation outside US large caps, and a renewed focus on Europe and Asia.

Sharp adjustments in yields call for agility on duration

The growth optimism that was reflected in US bond yields when Trump’s election victory gained ground has now turned into a growth scare coming from the uncertainty on his tariff policies. In contrast, Germany’s fiscal push and a realisation across the EU that it should invest more have caused an upward shift in yields across large European economies. The main question remains how soon the benefits of this plan can percolate through to the real economy, and whether other European countries can afford higher yields. Long term, European growth will likely get a boost from more spending but near term implementation risks on fiscal spending remain.

In global equity, stay well diversified

President Trump’s policy gyrations are hurting market sentiment at a time when US valuations are still high. The uncertainty emanating from such policies make corporate investment decisions difficult and also cloud the earnings outlook. Hence, it is important to diversify away from the concentration risks in the US, and benefit from this rotation, with a focus on earnings resilience. For instance, in Europe and in China, while the rotation out of the US has been positive so far, the next leg of performance would depend on earnings. 

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Read the full article on the Amundi Research Center