Resilience and fragmentation were the major themes

at this year's IMF annual meetings.

It was however not just a case of 'US exceptionalism'.

Aside from China – which presenters sometimes

competed to be the most pessimistic on – resilience

was remarked on all the way across the DM-EM

spectrum.

Higher for longer' dominated central bank

communications and was judged to be a key

component contributing to the recent rise in yields.

Fiscal largesse (primarily the US's) was also a

prominent topic – one that was not discussed at the

IMF Spring meetings. Bond vigilantes may eventually

force a government adjustment, but few thought

governments would self-correct.

Deglobalisation pressures and reshoring were also top

of mind. The dollar's position is not under threat, but

trade flows and shifting production locations were

thought to be evidence of fragmentation. China's

success in electric vehicle manufacturing is regarded

as good for the environment but expected to be the

next front in global trade tensions.

AI's potential impact on productivity and geopolitical

tensions was explored, with experts urging caution in

implementation and integration and an immediate

boost to productivity considered unlikely.

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