Agenda and delegation to be announced.&nbsp;For more information,&nbsp;<a href="https://www.worldbank.org/en/meetings/splash/spring" target="_blank" rel="noopener" data-link-source="tiny">click here</a>.

The Spring Meetings of the IMF|WBG bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.



2025 Spring Meetings of the International Monetary Fund (IMF) & World Bank Group (WBG)

Transcript

The global economy continues to defy expectations, powering ahead over the past couple years even amid interest rate hikes, geopolitical instability, and other headwinds. With consumer spending still strong and central banks having largely turned more dovish, 2025 is starting from a favorable setup. Meanwhile, President Trump takes office again next week, vowing tough tariffs and tax cut extensions. What will the net impact be? And what of China and the rest of the world? Chief Economist Nathan Sheets shares his views on these and other topics with host Rob Rowe.This podcast contains thematic content and is not intended to be investment research. Nor does it constitute financial, economic, legal, tax or accounting advice. This podcast is provided for information purposes only and does not constitute an offer or solicitation to purchase or sell any financial instruments. The contents of this podcast are not based on your individual circumstances and should not be relied upon as an assessment of suitability for you of a particular product, security, or transaction. The information in this podcast is based on generally available information and, although obtained from sources believed by Citi to be reliable, its accuracy and completeness are not guaranteed. Past performance is not a guarantee or indication of future results. This podcast may not be copied or distributed, in whole or in part, without the express written consent of Citi. © 2025 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.<o:p></o:p><o:p></o:p>

Rob Rowe is Head of the Global Strategy and Macro Group (GSMG) as well as the U.S. Regional Director of Research. GSMG unites all of Citi's economists with fixed income, FX, equity and commodities strategists to create a common team providing research on the world's major economies and asset classes. Rob has been with Citi for more than 30 years serving in various capacities. He originally joined Smith Barney Harris Upham &amp; Company in 1989, working in investment banking, fixed income sales and research.&nbsp; In addition to his managerial responsibilities, he continues to provide portfolio strategy for select clients as part of his previous role overseeing the Global Bond Portfolio Analysis team. He has written numerous articles and publications on fixed income and portfolio strategy.<o:p></o:p>

Rob Rowe, Head of Global Strategy and Macro Research and U.S. Regional Director of Research 

Nathan Sheets, Ph.D., is Chief Economist at Citi. In this role, Nathan leads Citi’s surveillance and forecasting of the global economy and directs the analysis of the firm’s economics team. He interacts closely with Citi’s major institutional clients and internal risk takers, and publishes research on cross-cutting themes shaping the global economy and financial markets.<o:p></o:p><o:p></o:p>Most recently, Nathan was Chief Economist and a member of the senior investment team at PGIM Fixed Income. He also has served as Under Secretary of the U.S. Treasury for International Affairs, representing the U.S. government on international economic issues. Previously, he held positions with Citigroup, as Global Head of International Economics, and with the Federal Reserve Board, as Director of the Division of International Finance and FOMC Economist. In addition, Nathan was a senior advisor to the U.S. Executive Director of the International Monetary Fund and a visiting fellow at the Peterson Institute for International Economics. He joined Citi in October 2021.<o:p></o:p><o:p></o:p>Nathan has a bachelor’s degree in Economics from Brigham Young University and a Ph.D. from the Massachusetts Institute of Technology.<o:p></o:p>

Nathan Sheets, Chief Economist, Citi 

Check out the related article on The Resilient Global Economy & Trump 2.0. 

The global economy continues to defy expectations, powering ahead over the past couple years even amid interest rate hikes, geopolitical instability, and other headwinds. With consumer spending still strong and central banks having largely turned more dovish, 2025 is starting from a favorable setup.&nbsp;<o:p></o:p>

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E20: The Resilient Global Economy & Trump 2.0

Report

Agentic AI - Finance & the ‘Do It For Me’ Economy

An artificial intelligence that can make autonomous decisions without human intervention. Meet agentic AI.&nbsp;<o:p></o:p>AI, and agentic AI could have a bigger impact on the economy and finance than the internet era.<o:p></o:p>This paradigm shift in AI is powered by a combination of technological breakthroughs in contextual understanding, memory, and multi-tasking abilities.<o:p></o:p>Agentic AI effectively turbocharges the Do It For Me (DIFM) economy. In financial services, users will have their own bots or AI agents helping them choose products and execute transactions. Competition will tick-up as starts-ups grow.<o:p></o:p>The nature of work could change. Those tasks that are outsourced today to contractors or third parties will be increasingly done by agentic AI.<o:p></o:p>The financial services sector is the second largest consumer of GenAI after the telecom and media sector. Historically, banks are the biggest spender on technology (outside of the tech industry). This trend will likely continue with GenAI and agentic AI too.<h5>Agentic AI Use Cases Across Financial Services</h5><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/678a4e5e4a24ce43ec43ec8d.png" alt="Chart showing different use cases in the financial industry." width="900" height="693"><o:p></o:p>Agentic AI is largely in an experimental phase – and this report offers up insights gleaned as we looked under the hood on what is being built now for future production.<o:p></o:p>We spoke to 30+ AI startup founders, BigTech executives and other external experts in preparing this GPS report.<o:p></o:p>It highlights some of the key use cases of agentic AI in financial services, ranging from compliance, deepfake and fraud prevention, onboarding and KYC, wealth, credit, treasury workflows, and much more.<o:p></o:p>

Finance & the ‘Do It For Me’ Economy

An artificial intelligence that can make autonomous decisions without human intervention. Meet agentic AI.&nbsp;&nbsp;<o:p></o:p>

Agentic AI

<ul><li>Our baseline forecast calls for the global economy’s resilience to continue, with global growth running at 2.6% in 2025.</li><li>Trump 2.0 policies are a factor to consider, with wide uncertainties around the administration’s agenda. </li><li>We see several factors fueling the recent rise in global long-term interest rates.</li></ul>

In a new Citi Research report, a team led by Chief Economist Nathan Sheets finds our basic narrative for the global economy remains intact, with global growth continuing at a solid — though not spectacular — pace. It’s a narrative we expect to continue in 2025, though the upward march in global long-term interest rates and uncertainty about the Trump administration’s policies are factors to watch.&nbsp;2024 growth has come in at 2.7%, matching 2023’s pace and just below our estimated trend. In each of the past two years, we’ve expected slowing, but it simply hasn’t materialized: Global demand has endured the central-bank hiking cycle remarkably well, while strength in global services spending has supported labor markets and wage growth and has ultimately fed back into consumer spending.&nbsp;The U.S. economy has kept powering ahead, outperforming most other developed markets. But strong performances have also come from the southern part of the euro area, especially Spain and Greece, and emerging-markets Asian countries such as India, Indonesia and Singapore have also recorded favorable growth. Strong economic expansion has continued in Brazil, though that’s triggered renewed inflation pressures.&nbsp;Our baseline forecast is for this global story to broadly persist in 2025, with global growth running at 2.6%. The U.S. economy shows few signs of meaningful slowing, growth in Japan is expected to bounce up to 1.25%, and the euro area should record another 1% expansion.&nbsp;Emerging-markets growth looks a little softer than last year, largely reflecting our projection for China. We see Chinese growth retreating from 5% in 2024 to 4.2% this year, as expected U.S. tariffs create headwinds. But we see upside risks from fiscal policy as authorities respond and we await the early-March announcement of China’s 2025 growth target, which could be set as high as 5%.&nbsp;We also see global inflation moving in line with our narratives. Headline inflation has now returned to near its pre-pandemic pace thanks to a sharp drive in food and energy prices, with core inflation also declining significantly. Core services inflation has descended more gradually, but we expect it will continue to move down. The fact that longer-term inflation expectations are generally well anchored near central banks’ targets reinforces our confidence.&nbsp;Global labor markets, however, remain tight, with unemployment rates having risen relative to their post-pandemic troughs, but generally by 1 percentage point or less. The fact that labor markets have remained tight, and the implications for wage growth and services inflation, remain the principal constraints on how quickly central banks cut rates.&nbsp;<h3>“In each of the past two years, we’ve expected slowing, but it simply hasn’t materialized.”</h3>&nbsp;In considering risks to the global economy, we’re watching two things closely. The first is Trump’s economic policies; the second is the upward streak in long-term rates in the U.S. and other countries that we’ve seen over the past few months. Either could potentially slow or even derail the global expansion’s vibrance.<o:p></o:p><h5>The environment for sovereign yields<o:p></o:p></h5>We considered the uncertainties around Trump 2.0 policies and our “baseline Trump scenario” in December, with a summary of our thinking available <a href="https://www.citigroup.com/global/insights/the-resilient-global-economy-and-trump-2-0">here</a>. A new consideration is the rise in long-term interest rates; since the Fed’s September meeting, 10-year sovereign yields have increased roughly 100 basis points (bp) in the U.S. and the UK and 40 bp in Germany, France and Japan.<img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/678fca9db4790379f269a615.png" width="975" height="432">&nbsp;Strikingly, though, central banks have continued to cut rates. The Fed has done so by 100 bp, the European Central Bank by 75 bp, and the Bank of England by 25 bp. The divergence between the short end and the long end of global rates curves is a striking feature of the current economic and financial environment, one we see as largely (though not entirely) a reflection of some important U.S. developments.<o:p></o:p>The first development is the continuing strength of the U.S. economy. U.S. real GDP growth accelerated to an above-trend 3% pace during last year’s second and third quarters, and many estimates see fourth-quarter growth running at 2% or higher. A sustained loosening of the labor market saw the unemployment rise high enough to trigger the Sahm rule, which states that a recession is under way when the three-month moving average of the U.S. unemployment rate rises by 0.5 percentage point or more from its 12-month low. Conditions have arguably now stabilized, with the unemployment rate hovering at just slightly above 4% over the past six months.<o:p></o:p>The second development is that with the U.S. economy showing momentum, the perceived need for Fed rate cuts to “shore up the economy” has diminished. Expectations for Fed policy have shifted appreciably of late; markets now see the 2025 year-end federal funds rate at 3.9%, suggesting only one or two rate cuts this year. Expectations for other developed-markets central banks have also shifted, though not nearly as much.<o:p></o:p>Third, some market participants clearly fear Trump 2.0 policies will be more aggressive and more inflationary than we envision. We note that the first Trump administration often saw a wide divergence between the president’s political statements, his policy proposals and policies that were ultimately implemented. That said, we acknowledge the outsized uncertainties around Trump’s agenda and the corresponding risks.<o:p></o:p>Fourth, the rise in global long-term rates clearly reflects market unease with the fiscal trajectory in several major economies. This is particularly true of the U.S. and the UK, which have seen the sharpest rise in rates since September. But it’s also probably at work in the ongoing gap between French and German yields, given France’s fiscal challenges.<o:p></o:p>The ultimate question is what this run-up means for the economic outlook. We think some of the bite of higher long-term rates should be offset by central banks’ rate cuts. And to the extent that higher rates reflect stronger economic performance, they’re a natural equilibration mechanism to guard against overheating.<o:p></o:p>Finally, we note that such run-ups don’t always persist. In the fall of 2023, U.S. 10-year yields touched 5%, but fell to 3.9% by year’s end. If recent rate moves prove more durable, they will likely restrain the pace of growth in economies world-wide. It’s too early to consider cutting our 2.6% global growth forecast for 2025, but we do increasingly wonder when (or if) the global economy will achieve growth above its 3% historical trend.<o:p></o:p><o:p></o:p><o:p></o:p>

Our new report, Global Economic Outlook &amp; Strategy: Resilient Global Growth, Higher Long-Term Rates, &amp; Trump 2.0, also includes country-by-country discussions. The report is available in full to existing Citi Research clients <a href="https://www.citivelocity.com/t/eppublic/3Vtkd">here</a>.<o:p></o:p>

Global Economic Outlook & Strategy

In a new Citi Research report, a team led by Chief Economist Nathan Sheets finds our basic narrative for the global economy remains intact, with global growth continuing at a solid — though not spectacular — pace.

Resilient Global Growth, Higher Long-Term Rates, & Trump 2.0

<ul><li>Trump inherits a strong U.S. economy, while the global economy has shown dogged resilience.</li><li>Our “baseline Trump scenario” sees Trump 2.0 policies as a complex mix, with tariffs a major source of uncertainty.</li><li>Tariffs are by the far the largest source of concern for the rest of the world.</li></ul>

In our new Must C report, a team led by Chief Economist Nathan Sheets looks at the economy Trump inherits in his return to the White House and the new unknowns introduced by his reelection.<o:p></o:p>Trump becomes president again with a U.S. economy that has been the best performing among major developed markets, powered by a resilient consumer and a strong corporate sector. Meanwhile, the global economy continues to display dogged resilience and looks poised for another year of near-trend performance.<o:p></o:p>At the same time, Trump brings new unknowns to the economic outlook. We examine a “Baseline Trump Scenario” that includes tariff hikes (especially on China), an extension of the 2017 Trump tax cuts, sharp curbs on immigration, broad deregulation of Biden-era requirements, and a potential boost to animal spirits — emotional factors that influence consumer and investor confidence. We recognize broad uncertainty around each policy area, but offer our best guesses about how these areas will evolve.<o:p></o:p>Our conclusion is that Trump’s policies represent a complicated mix of favorable and adverse supply and demand shocks. For U.S. economic growth, our forecast envisions these effects as perhaps balancing out. For U.S. prices, the effects look to skew toward some moderate upward pressures. The clear implication is that over the coming year, the Fed will need to remain alert for signs of emergent inflation pressures, and monetary policy may need to be a bit tighter.<o:p></o:p>For the rest of the world, Trump’s tariff policies are by far the largest source of concern, with countries subject to tariffs facing an adverse demand shock as their access to the U.S. market diminishes, threatening to weaken growth and lower inflation and possibly requiring non-U.S. central banks to be more stimulative with policies.<o:p></o:p>In our view, an important framing thought is that we’ve already seen Trump in the White House. During his earlier term, he was assertive in his rhetoric and policies but ultimately avoided actions that were seriously disruptive, and the economy and the markets generally performed well during his tenure.<o:p></o:p>Looking around the world, China’s economy faces significant downside risks from the possibility of large tariffs. Europe also faces a range of question marks for Trump’s second term, particularly in the areas of tariffs and security. Many of Trump’s core policy concerns also touch Latin America in one form or another, with Mexico looking most exposed but Brazil and Panama additional names to note.<o:p></o:p>Turning to financial markets, we see little worry for broader U.S. equity indexes in a targeted tariff regime, especially since many corporates were granted carve-outs in Trump 1.0 and companies can pass through these costs. On the other hand, broader tariffs could bring a more meaningful hit to margins. Equity markets outside the U.S. are likely to get hit even harder in various tariff scenarios, and felt sizable headwinds from Trump 1.0 tariffs.<o:p></o:p>From a broad perspective, asset prices in 2025 will be significantly driven by the path of Trump’s policies. Uncertainty is likely to persist and be a feature of Trump’s presidency; Trump seems to thrive in a world of ambiguity in which his political opponents and international counterparts aren’t clear about his next move. In our view, investors who stay nimble but also focused on underlying strong economic fundamentals are likely to reap benefits.<o:p></o:p>The full report, Must C: Trump 2.0 – Expectations for the Economy and Financial Markets, also includes perspectives on Trump 2.0 from other economies and regions and is available <a href="https://ir.citi.com/CQN-iswtGFQCZSCX7ZSmwx8EGfV1V10dJ5MQzYBh-VY7neE2bjaEtWD1PlegBWaJIX_UsmLNscAqevTN1OCD16a_KP9638ISVSYghcJqSBA%3D" target="_blank">here</a>.<o:p></o:p>

In our new Must C report, a team led by Chief Economist Nathan Sheets looks at the economy Trump inherits in his return to the White House and the new unknowns introduced by his reelection.

Trump 2.0: Expectations for the Economy and Financial Markets

Donald Trump is back in the White House, and his policy actions are being watched closely by the markets and the world at large. Trump’s tariff plans — including those toward China — feature prominently in his policy rhetoric. Yet China’s global manufacturing dominance persists, and the United States remains reliant on it for imports. How will U.S. trade with China change in a second Trump administration? Join host Brent Robinson, Head of Research for Japan, Australia, North &amp; South Asia, as he discusses this topic in detail with Johanna Chua, Head of Emerging Markets Economics.<o:p></o:p><o:p></o:p>This podcast contains thematic content and is not intended to be investment research. Nor does it constitute financial, economic, legal, tax or accounting advice. This podcast is provided for information purposes only and does not constitute an offer or solicitation to purchase or sell any financial instruments. The contents of this podcast are not based on your individual circumstances and should not be relied upon as an assessment of suitability for you of a particular product, security, or transaction. The information in this podcast is based on generally available information and, although obtained from sources believed by Citi to be reliable, its accuracy and completeness are not guaranteed. Past performance is not a guarantee or indication of future results. This podcast may not be copied or distributed, in whole or in part, without the express written consent of Citi. © 2025 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.<o:p></o:p>

Brent Robinson is a Managing Director and Head of Research for Japan, Australia, North &amp; South Asia. Brent has been instrumental in driving the Citi Research franchise to become a top house in Asia-Pacific today. He joined Citi in September 2005 from Macquarie Securities, where he was Deputy Head of Asia Pacific research and head of Pan-Asian industry research since 2002. Brent was promoted to his current role in July 2009. Prior to that, he spent 16 years at Merrill Lynch, including 10 years in New York, where he worked in a variety of roles relating to unit trusts, sales-trading, trading and private client research. Brent moved to Hong Kong in 1996 as Product Manager for Asian research, and was subsequently promoted to Deputy Head of Research for Asia Pacific. Brent completed his Bachelor's degree at the University of South Carolina in 1985 and his Executive MBA degree at Kellogg/HKUST in 2000.<o:p></o:p>

Brent Robinson, Head of Research for Japan, Australia, North & South Asia 

Johanna Chua is a Managing Director, Head of Emerging Market Economics, and Chief Asia Economist at Citigroup. Based in Hong Kong, she oversees economic research across Emerging Asia, Central &amp; Eastern Europe, the Middle East &amp; Africa, and Latin America.&nbsp; Prior to her appointment, she was the head of Economics Research for Asia-Pacific, including Japan and Australia. Before 2009, she was the Chief Asia Emerging Markets Trading Strategist (Fixed Income, Commodities and Currencies), and the Asia Sovereign Fixed Income Analyst. Johanna has a Ph.D. in Economics from Harvard University and is a summa cum laude graduate of the University of the Philippines.<o:p></o:p><o:p> </o:p>

Johanna Chua, Head of Emerging Markets Economics

Donald Trump is back in the White House, and his policy actions are being watched closely by the markets and the world at large.&nbsp;<o:p></o:p>

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E21: Trade with China under Trump 2.0

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