Q4 Outlook: Global Economy Staggers Toward Year End


• Volatility has been the story of 2019. The markets have dealt with uncertainty around global trade restrictions, recession fears and the possibility of impeachment of President Donald Trump.

• We project these headwinds will cause global economic growth to remain relatively weak for the remainder of the year.

• We believe the likelihood of a near-term recession is unlikely and tentative signs of economic stabilization could develop in the next few months.


Despite a tepid 2.3% gross domestic product (GDP) growth rate through the first half of the year, the U.S. economy continues to be the engine that drives the global economy. However, we continue to have concerns about the negative impacts from the current status of global trade.

We were disappointed by the Trump administration’s decision to enact a 15% tariff effective Sept. 1 on certain consumer goods. These latest tariffs could hamper consumer spending, which consistently is the key driver of the U.S. economy. In addition, the U.S. plans to raise tariffs on the original $250 billion in Chinese goods by 5 percentage points to 30% in December and apply a 15% tariff on the remaining consumer goods that had been left alone. We are hopeful the weaker trajectory in economic growth, coupled with possible weaker poll numbers, will encourage Trump to consider pausing the trade war with China and refraining from additional tariffs until after the 2020 elections.

Our projections don’t take into account the impeachment inquiry now underway in the House of Representatives. While we believe it’s too early to gauge the impact of these proceedings, we do not believe the Senate would produce the necessary 67 votes to convict Trump in the event the House returns articles of impeachment.