Quarterly Review of Financial Markets and Outlook Q2/2025
857 Tuesday, 8 July 2025 16:18
In the second quarter of 2025, the global economy was dominated by persistent trade tensions, monetary policy adjustments and a still fragile economic recovery.
The Trump administration reignited the trade war with China imposing tariffs of up to 145%, before reducing them to 55% at the end of June, while brandishing the threat of new taxes against Europe.
This protectionist approach slowed US growth, weakened household confidence and slowed the job market, although inflation remained moderate at 2.4%, target rates were maintained between 4.25% and 4.50%.
The ECB lowered its rates to 2%, however economic activity remains sluggish with growth expected at 0.9% and inflation generally under control, meanwhile in Switzerland the SNB reacted to negative inflation (–0.1%) by reducing its key rate to 0%.
In China, consumption experienced a marked rebound in May (+6.4%), stimulated by exceptional promotional campaigns, but this recovery remains artificial in a context of persistent deflation and increased trade tensions.
Overall, major economies are operating in a climate of uncertainty where monetary policies remain cautious and growth still largely relies on temporary or external support.
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