Economic Outlook Darkens as Fitch Anticipates Deeper Rate Cuts

In a surprising turn of events, Fitch Ratings has announced its expectation for significantly deeper interest rate cuts by the European Central Bank (ECB) and emerging market central banks. This forecast adjustment is a direct response to the deteriorating global economic landscape.

Trade War Escalation Impacts Global Growth

The revision comes at a time when the escalating trade war between the US and China has forced Fitch to reduce its 2025 world growth forecast by 0.4%, marking the lowest growth rate since 2009, excluding the pandemic period. The recent sharp tariff increases have pushed US effective tariff rates to their highest since 1909.

What This Means for the Future

"We now expect deeper rate cuts from the ECB and in emerging markets," Fitch emphasized in its latest report. This statement underscores the growing concern over the global economy's health and the potential measures central banks might take to mitigate the impact.