Fed holds rates steady, Middle East tensions rise, and global growth signals remain mixed
Economic Radar
Week of June 16–20
A week of contrasts: mixed signals across growth, interest rates, and geopolitics
This week was shaped by key central bank decisions, contrasting economic indicators, and renewed geopolitical tensions. Below is a summary of the most relevant developments by region:
- United States: The Fed held its benchmark rate at 4.25%–4.50% and revised its projections: GDP growth was lowered to 1.4% (from 1.7%) and core inflation was raised to 3.1% (from 2.8%). While two rate cuts remain on the table for 2025, seven members now forecast no changes. In parallel, retail sales fell 0.9% month-over-month, and Middle East tensions pushed oil prices higher following evacuation orders issued by Trump in Tehran.
- Europe: The ECB maintained a flexible stance without committing to further cuts. In the UK, annual inflation stood at 3.4%, in line with expectations. The Bank of England kept its rate at 4.25%, signaling potential cuts if conditions allow.
- China: The PBOC left benchmark rates unchanged. Retail sales surprised to the upside (+6.4% YoY), and industrial production grew 5.8% YoY.
- Brazil: The Central Bank raised the Selic rate to 15%, marking the seventh consecutive hike. Authorities anticipate elevated financing costs for longer to contain inflation, projected at 4.9% for 2025.
- Mexico: Investment fell 4% quarter-over-quarter in Q1 2025, marking the second consecutive decline. The IMEF projects the economy won’t regain momentum until 2027, amid uncertainty surrounding the judicial reform and USMCA renegotiation.
In a highly uncertain environment, discipline and analysis remain the foundation of a sound investment strategy.
KEY UPCOMING EVENTS
- In the United States, Powell will present his semiannual monetary policy report 06/24
- In the United States, GDP data will be released 06/26
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