The first half of this year has been a particularly volatile one for both the economy and financial markets. President Trump came into office with a strong mandate for change and has seemingly been doing everything he can to live up to the promises he made on the campaign trail—even though some of these changes have proved to be highly controversial for large parts of the country and the global economy. Yet, despite all of this, the economy has so far proved resilient and defied earlier expectations for stagflation. Looking to the second half of the year, growth is likely to moderate, and the Fed will likely soon start to lower interest rates, despite a possible uncomfortable blip upward as the impact from tariffs is passed through to consumers.
In this Economics Weekly, Richard de Chazal presents a midyear update, with a review and preview of the first and second halves of 2025.