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Mixed macro data as China enters the Year of the (Fire) Horse. Domestic supply-demand imbalances culminate in record trade surpluses. Policy targets to be announced in early March; China to benefit from US Supreme Court ruling.

Global Monthly - Geopolitics bad, macro good

Macro economy

25 February 2026

Nick KounisBill DivineyJan-Paul van de KerkeRogier QuaedvliegArjen van DijkhuizenPhilip Bokeloh(+5)

While the risks have certainly not gone away, economic data has been generally firming, while near term positive impulses are getting stronger. Higher AI capex spending looks to be bigger than expected, fiscal stimulus is ramping up and financial conditions remain easy. So far geopolitics has been the dog, which barks very loudly, but does not bite. That cannot be taken for granted with Iran the latest flashpoint. SCOTUS decision to scrap IEEPA tariffs may not change too much, not least because fresh tariffs have largely replaced the old ones. There is an increasing chance that the global economy may run hot in the near term but also of a future hangover further down the line.

Key views Global Monthly February 2026

Macro economy

25 February 2026

Bill Diviney

The transition from one world order to another is in full swing, but it is still unclear how that new world order will look. The advent of AI, China’s rise, and the US’s relative decline offer challenges but also opportunities. US import tariffs remain a dampener on global trade, despite the recent US Supreme Court ruling. Still, global growth has been resilient given the headwinds. Our base case sees that resilience continuing, albeit with considerable risks. Growth in the US is expected to stay solid, but this masks variation and vulnerability below the surface. Eurozone growth is expected to pick up on higher German fiscal spending, while China may take modest measures to lift demand while keeping its manufacturing growth model intact. Inflation in the US is expected to pick up, but to stay broadly benign in the eurozone. Despite this, the divergence in Fed & ECB rates is expected to narrow significantly, with the ECB expected to keep rates on hold, and the Fed looking through the US inflation overshoot and prioritising the labour market by continuing to cut rates.

Top of Mind - Out with the old tariffs, in with the new

Macro economy

23 February 2026

Rogier QuaedvliegArjen van DijkhuizenBill Diviney(+2)

After a surprisingly long delay, the Supreme Court ruled 6-3 last Friday that the International Emergency Economic Powers Act (IEEPA) does not give the President the authority to impose tariffs. Importantly, they referred the decision on whether paid tariffs, over $160 billion, have to be refunded back to lower courts. The Trump administration was quick to reimpose tariffs through other means. Still, overall tariff levels were somewhat reduced, with some countries benefiting substantially more than others.