The world seems a pretty volatile place right now. Over the past few months the vagaries of American trade policy have threatened to upend the global economy. The ebb and flow of tensions in the Middle East has only added to the prevailing sense of uncertainty.
Against this backdrop, the International Monetary Fund — along with central banks like the Bank of England — has stressed how recent developments are greatly clouding the economic outlook. Uncertainty has remained high, in the IMF’s view, even as effective US tariff rates have come down from the levels announced in early April.
This matters. One of the main ways in which higher tariffs affect the global economy in the near term is through their impact on perceptions of uncertainty. Delays to investment plans, or the cancellation of major projects, are an inevitable consequence of a less certain outlook.
As a result,…
