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 forecast is in response to deteriorating global economic conditions.

Trade War Escalation Impacts Growth

The adjustment in expectations comes as an escalating trade war between the US and China has led Fitch to reduce its 2025 world growth forecast by 0.4%. This decrease brings the forecast below 2%, marking the lowest growth rate since 2009, excluding the pandemic period.

Historic Tariff Rates

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