Events in the global economy and geopolitics have definitely accelerated. Since the outcome of the US presidential election last November, we have been pointing out that the effects of this change on the global economy are difficult to predict and far from obvious. The actions of the new US administration in recent weeks have triggered a sequence of events that has caused a fundamental revision of the economic scenarios priced in by financial markets. Three themes of key importance for the economic and market outlook are playing out in parallel: 1) the turn towards greater protectionism in international trade, 2) the loosening of fiscal rules in Europe, and 3) the efforts to suspend/end hostilities in Ukraine. Each of these has different possible consequences for the future economic growth, inflationary trends and monetary policy outlook - we try to map the main effects in the table on page 7. 

It is now three months since the re-election of Donald Trump as US president, and uncertainty about the effects of changes in US policy on the global economy and global security has not decreased significantly, but rather has entered a new level. It has become apparent that even decisions already announced and taken (as in the case of the imposition of 25% tariffs on Canada and Mexico) tell us little about what will actually happen, as they can be put on hold or reversed in an instant. On one hand, it makes economic forecasting still difficult; on the other hand, it leaves open the possibility that, for example, fears of a sharp turn towards trade protectionism that could harm the global economy will ultimately materialise only to a limited extent (...)