Global Economic Conditions Worsen

Fitch Ratings announced on Wednesday that the European Central Bank (ECB) and central banks in emerging markets are expected to implement significantly deeper interest rate cuts. This prediction comes as global economic conditions continue to deteriorate.

Trade War Escalation Impacts Growth

The revision in expectations is largely due to an escalating trade war, which has led Fitch to reduce its 2025 world growth forecast by 0.4%. This adjustment brings the growth rate below 2%, marking the lowest since 2009, excluding the pandemic period.

Historic Tariff Hikes

Sharp tariff increases between the US and China have pushed US effective tariff rates to their highest since 1909. "We now expect deeper rate cuts from the ECB and in emerging markets," Fitch emphasized in its report.