Tariff uncertainty continues to weigh on the US and global economies; but with rates now known for many US trading partners, the Fathom team has made a preliminary estimate of their likely impact on trade, GDP and US inflation.

The forecast considers the outlook for US rates against a backdrop of softer economic data, pressure on Fed Chair Jerome Powell to cut interest rates and potential changes to the FOMC. We examine US and China competition over AI from the angle of energy supply and demand, what it will take for the US to keep pace with China in energy and AI, and where and why it might fall short.

The EU’s outlook seems to be improving, thanks to a German promise to loosen fiscal policy and NATO members’ pledge to increase military and infrastructure spending. Recent Fathom work also shows that the region’s productivity slowdown may not have been as bad previously thought. But the usual fragilities remain, thanks to the lack of synchronicity between monetary and fiscal policies.