In the third quarter, we believe the global economy will face three risk factors: economic slowdown, with inflation and interest rates remaining high; risks from tighter financial liquidity; and slower economic growth in China and emerging markets.
In the United States, the Conference Board leading economic indicators have fallen for a 13th consecutive month, while retail sales are slowing. Private investment, measured by orders for durable goods, has also slowed sharply. Consumer price inflation, at 4.0% in May, is down from 9.1% in June 2022 but still relatively high, pressuring the Federal Reserve to signal more interest-rate increases.
