What to expect at a first 'get-to-know-you' meeting

• With energy prices under control and declining wage growth, inflation rates are continuing to fall almost everywhere. Inflation in the euro area is already within the central banks' 'comfort zone'. In the US, however, core inflation remains somewhat higher and the rising import duties are having a noticeable effect on output prices. 
• With a number of key trade agreements in place, the new average import tariff is estimated at 15% (compared to 2.5% before Trump II).  The tariffs could have a limited further impact on retail prices. The US Supreme Court is due to rule on the legality of these import taxes.

• The 'Big Beautiful Bill', which mainly extends the expiring tax cuts from Trump's previous term, is expected to provide a limited boost to growth. Meanwhile, the US government shutdown has been lifted for the time being.
• China continues to regularly support its flagging economy with new policy measures. In the euro area, the major investments announced for defence and infrastructure are gradually taking more concrete shape, although it looks as if their impact won’t be felt fully until 2026-27.
• The ECB kept its deposit rate unchanged at 2% in September, with further movements dependent on economic data. Our economists do not expect the Bank to cut interest rates further next year.
• The Fed lowered interest rates as expected. The dot plot projects just one rate cut in 2026, but we and the market believe that two will be made as early as the first quarter.  
• US President Donald Trump is expected to name Chairman Powell’s successor early next year.

• Despite weaker growth, falling inflation and lower key rates, bond yields remain at somewhat higher levels in both the US and Europe. 
• The fiscal about-turn by the new German government, lifting the ‘debt brake’ and allocating a generous budget to relaunch policy and defence spending, explains the higher yields in Europe.
• The -once again- volatile political situation in France caused interest rates to rise a little further.
• In recent weeks, interest rates have normalised and stabilised somewhat.

• Stock markets have again hit new all-time records in recent weeks. The markets got off to a strong start this year after a solid 2025. Earnings forecasts for the fourth quarter and for 2026 are strong, which accounts for the solid performance. The outlook for government investment and investments in AI infrastructure is boosting profits. 
• Reduced geopolitical tensions could in turn lead to a reduction in costs due to lower commodity prices.

• On the financial markets, the conflict in the Middle East has taken something of a back seat, but there is nothing to prevent it from flaring up again. Although the situation in Ukraine would appear to be moving in the right direction, an agreement has still not been reached. 
• The US intervention in Venezuela at the start of this year didn’t spook the markets. Underlying concerns about private lending remain following several bankruptcies. The markets are less concerned about these developments for the time being, but sentiment could turn quickly.