ABN AMRO MeesPierson: slower growth, many uncertainties in H2 of 2025

At the same time, US trade policy remains surrounded by uncertainties. With these factors in mind, ABN AMRO MeesPierson will head into the last six months of the year with a neutral equity weighting and a slightly positive attitude to bonds. This more cautious positioning offers investors enough flexibility to seize opportunities. The private bank explains this in its Investment Strategy for the second half of 2025, published today under the title ‘Roadmap for uncertain times’ (link).

“The longer the situation around Trump’s tariffs remains uncertain, the greater the harm to the economy will be,” says Ralph Wessels, Head of Investment Strategy at ABN AMRO MeesPierson. “Consumers are more cautious about spending, companies are postponing investment decisions and global trade is declining. The tariffs that are already in place are depressing economic growth. In light of this, we reduced the level of risk in the portfolio in May, bringing the equities weighting back to neutral, in favour of cash. Investors with larger cash reserves now will be able to respond quickly when opportunities arise.”

Higher trade barriers than a few months ago

One positive that ABN AMRO MeesPierson sees is the trade deal recently signed by the US and the UK, which could serve as a blueprint for a deal between the US and the EU. At the same time, the private bank notes that the UK appears to be resigned to the current 10% tariff. “This means America’s trade barriers are much higher now than they were a few months ago,” comments Wessels, who compares the situation with the trade war between the US and China. “Despite the de-escalation in May, the tariffs on imports from China and the more general tariffs are still much higher than they were at the start of the year. This is a negative factor that is particularly affecting the US economy.”

US economy suffering under the tariffs

Although ABN AMRO MeesPierson does not foresee a recession, the private bank expects a slower growth rate in the US this year and next, dropping below the trend rate. One specific consequence of the tariffs is that consumer prices in the US will go up. In other words, inflation will rise. This is not only bad news for American consumers, argues ABN AMRO MeesPierson: it also means that the Federal Reserve will have little scope for now to lower interest rates.

Europe: strong recovery after slower growth

Europe will also feel the impact of the tariffs during the second half of the year. ABN AMRO MeesPierson expects the eurozone’s growth to drop below the trend rate during the quarters ahead. However, the growth rate could surge again in 2026, boosted by significantly higher government spending, including investments in infrastructure and defence. The private bank also highlights Europe’s low inflation forecasts, which give the ECB – unlike the Fed – enough scope to proceed with interest rate cuts, which will benefit the economy.

High-grade European bonds offer opportunities: high yields beckon

ABN AMRO MeesPierson is positive about high-grade European bonds, including government bonds. This segment could benefit if the ECB lowers interest rates during H2 of 2025. The private bank believes that high-grade European bonds could be an attractive alternative to savings accounts (where interest rates are also going down). For corporate bonds, the bank prefers companies with a high credit rating (investment grade) over the greater risks in the high-yield segment. Even so, the bank acknowledges that high yields will become more attractive. Wessels explains, “Concerns about economic growth have forced the risk premium on high-yield bonds up significantly in recent months. In time, it could be beneficial to invest more in those high yields, as long as we avoid a recession. If we don’t, the risk premium could rise even further.”

A gold lining to the portfolio

In the midst of all the macroeconomic uncertainty and geopolitical unease, gold has rallied strongly during the first six months of 2025. Despite the higher price, however, ABN AMRO MeesPierson still believes that gold offers upward potential, and the bank recently added gold to its investment portfolio.