Trump Treasury Sec. Bessent to speak with Chinese trade counterpart on Friday

Since our last meeting in April, global economic activity has remained subdued but steady, despite ongoing trade policy headwinds. This resilience partly reflected a frontloading of demand in anticipation of tariffs, which temporarily boosted activity but is unlikely to be sustained. As this effect fades, global growth dynamics are expected to soften further. A predictable and open international economic order remains essential to sustain global trade, investment and shared prosperity. While recent preliminary trade agreements have reduced uncertainty, it remains elevated and may weigh on investment. The full impact of the evolving policy environment will only become clearer over time, but early signs are already visible in the reconfiguration of global trade flows. Global headline inflation is projected to moderate gradually, though the outlook is expected to diverge across countries, reflecting the varying impact of the volatile global policy environment, especially in relation to trade and fiscal policies and geopolitical tensions. In this environment, while monetary policy stances are set to become more divergent, it is imperative that central banks have the independence to fully deliver on their mandates. ECB'S LAGARDE SAYS ECONOMIC ACTIVITY SUBDUED BUT STEADY ECB's Lagarde: The outlook for euro area inflation remains uncertain, range of has narrowed. ECB's President Lagarde: Liquidity vulnerabilities remain elevated.

FED'S MUSALEM: I COULD SUPPORT A PATH WITH ANOTHER CUT IF MORE RISKS TO JOBS EMERGE AND INFLATION CONTAINED FED'S MUSALEM: IMPORTANT FOR FED TO BE CAUTIOUS RIGHT NOW FED'S MUSALEM SAYS SEES LIMITED SPACE BEFORE RATE CUTS WOULD MAKE POLICY ACCOMODATIVE FED'S MUSALEM: BROADLY SPEAKING, JOB MARKET IS AROUND FULL EMPLOYMENT RIGHT NOW JOB GAINS HAVE BEEN AFFECTED BY IMMIGRATION CHANGES SEES 30K-80K JOB MARKET BREAKEVEN RATE WE COULD SEE NEGATIVE PAYROLL PRINTS BUT UNEMPLOYMENT MAY NOT MOVE IS NOT SEEING AN INCREASE IN LAYOFFS… FED'S MUSALEM SAYS WE ARE IN A PARTICULARLY UNCERTAIN MOMENT || IT'S PREMATURE WHAT TO SAY COMES WITH FOMC MEETINGS AFTER OCTOBER || TARIFF IMPACTS STILL FLOWING INTO ECONOMY || TARIFFS WILL WORK THROUGH ECONOMY INTO MIDDLE OF NEXT YEAR ST LOUIS FED'S MUSALEM Q&A/IIF: THE LONGER MISS 2% INFLATION TARGET 'THE MORE IMPORTANT WE GET THERE;' EXPECT MORE PROGRESS NEXT YR #Musalem #FederalReserve #economy