US President Donald Trump’s aggressive trade policies have abruptly set the world onto a path of slower growth and higher inflation that could worsen notably if tensions escalate, the OECD said.
The Paris-based club of 38 rich countries cut its outlook for most members and predicted the pace of global expansion to slow to 3.1% this year and 3% in 2026 as barriers restrain commerce and surging uncertainty holds back business investment and consumer spending.
Nations currently in the eye of the trade storm may see even sharper decelerations, with Canada’s growth rate tumbling to less than half the OECD’s December prediction, Mexico entering a recession, and the annual expansion in the US wilting to 1.6% next year — the weakest since 2011 aside from the initial Covid pandemic hit suffered in 2020.
MacroPolicy Perspectives founder and president Julia Coronado explains why the US Federal Reserve faces difficult near-term decisions and how uncertainty is being reflected in various corners of the market and geopolitical landscape. Julia speaks with Tom Keene and Paul Sweeney on Bloomberg Radio.
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