Global investors face uncertainty due to trade war and moderate optimism.

Global investors are currently facing a moment of uncertainty, with the possibility of a trade war emerging as the primary concern on the economic horizon. According to the latest fund manager survey conducted by Bank of America, 37% of respondents believe that the tariffs proposed by the Trump administration could spark trade conflicts that would severely impact the U.S. economy and, consequently, the global economy. This unease is further compounded by fears of a potential rise in inflation, which could result in a tightening of monetary policy by the Federal Reserve, thereby limiting growth prospects. However, despite these concerns, investors appear to maintain an optimistic outlook for the future. The survey indicates that most managers do not foresee a recession in the United States over the next 18 months. This optimism is supported by hopes that factors such as a possible recovery of the Chinese economy and advancements in artificial intelligence could generate significant momentum in productivity and global economic development. 40% of fund managers are particularly hopeful about the resurgence of the Chinese economy, which could revitalize trade and financial markets worldwide. This perspective contrasts with the negative perception surrounding Trump's trade policies, which, according to some analysts, could lead to weaker economic growth. Benjamin Melman from Edmond de Rothschild AM warns that higher tariffs could negatively impact U.S. GDP growth, with International Monetary Fund estimates suggesting a reduction of 0.4% to 0.6% if tariffs increase by 10%. On the other hand, 13% of respondents express confidence that artificial intelligence will set the pace for improving business productivity, a change that could be crucial in a rising cost environment. This technological advancement presents an opportunity to optimize processes and reduce operating expenses, potentially counteracting the adverse effects of inflation. The possibility of a peace agreement between Russia, Ukraine, and the United States also emerges as a potential growth catalyst. A treaty that stabilizes the region could have positive effects on energy and food markets, given that Russia is a major exporter of gas and Ukraine of grains. Such an agreement could alleviate the economic tensions that have characterized recent years and allow for greater trade and resource flow. In Europe, there is a notable division in expectations regarding the impact of Trump's policies. While 50% of investors believe these policies will have a net positive effect on global growth and price stability, 17% predict a scenario of weaker growth and high inflation. These differences reflect the complexity of the economic environment and the diversity of opinions on how financial institutions should respond to changes in U.S. economic policy. Meanwhile, European investors also share concerns that the Fed might react aggressively to a rise in inflation by implementing more restrictive monetary measures. However, 12% of respondents view the promised tax cuts from the incoming administration as a reason for optimism, suggesting that there may be a potential path toward economic stability. Furthermore, projections for the year 2025 reflect an increase in investor optimism. Only 6% foresee a "hard landing" for the economy, a notable decrease compared to the 23% who shared this fear the previous year. This shift in perception may indicate greater confidence in the market's ability to recover and adapt to new challenges. Finally, 30% of fund managers believe that U.S. stocks will perform better, with expectations that indices such as the Russell 2000 and Nasdaq will show favorable behavior in the coming months. This focus on the technology sector and smaller-cap companies could be the result of renewed faith in innovation and growth as drivers of the future economy. As investors navigate an uncertain landscape, the balance between optimism and caution will be crucial for capitalizing on opportunities and mitigating the risks that lie ahead.