Current economic situation: stability and challenges
Global growth remains stable
Despite economic uncertainties, global growth is robust. Global forecasts indicate that the economy will remain stable, even if there are regional differences.
The chart shows global economic growth since the first quarter of 2022. 2022 and 2023 were still heavily impacted by the coronavirus pandemic. As can be seen, the situation has stabilized in 2024.
Inflation has largely normalized
In many countries, inflation has fallen significantly compared to the highs of recent years.
Inflationary pressure remains
In around 40% of OECD countries, however, inflation remains above the target value of 2%. A particularly prominent example is the USA, where the core inflation rate has remained stagnant at 3.3% since June.
Several factors are responsible for this:
- Labor shortages are leading to rising wages and ongoing cost pressure.
- Increasing protectionism is affecting trade and making supply chains more expensive.
- High budget deficits are exacerbating the economic situation and driving up inflationary pressure.
The role of the US Federal Reserve (Fed) in 2025
A central point of the discussion was the role of the US Federal Reserve (Fed) in the coming year. The Fed is facing a landmark decision:
- Will it tolerate the higher level of inflation?
In this case, the Fed could gradually cut interest rates further into the “neutral” range and thus support economic growth. - Will it stick to its inflation target?
Alternatively, the Fed could continue to act restrictively and keep interest rates high in order to bring inflation back to the target of 2% – with the possible consequence of slowing economic growth.
Outlook and conclusion
Developments in the USA will not only affect the US economy, but also have global implications. The change of government could bring additional momentum and uncertainty to the markets.
It will be interesting to see what course the Fed will take: Stabilizing growth or consistently fighting inflation?
What does this mean for investors? A diversified portfolio and forward-looking risk management remain essential, says our Chief Investment Officer, Simon Lutz.
Status: 17.12.2024
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