Bracing For The Air Pocket

2025-05-20 04:00:00 ET

Summary

• The current administration’s economic policies — particularly on trade — appear to be worsening the growth/inflation trade-off.
• I expect to start seeing the impact of tariffs between late May and early July.
• If you’re looking for a sign of where global trade might be headed, the U.K.-India deal is the better indicator.

With markets digesting a surge in tariffs and shifting fiscal rhetoric, we sat down with Olga Bitel, partner and strategist on our global equity team, to revisit her views on the global economy. In this wide-ranging conversation, Olga offers a candid assessment of growth prospects in the United States, Europe, and emerging markets (EMs)—and explains why the global economy may be headed for an “air pocket”—a period when the drag from tariffs sets in before any potential policy offsets, such as tax cuts or deregulation, have time to take effect. The coming months, she argues, will test the resilience of the post-pandemic expansion....

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