Latest news with #OrganizationforEconomicCo-operationandDevelopment
Yahoo
2 days ago
- Business
- Yahoo
2 Inflation-Protection ETFs Climb to Yearly Highs: Here's Why
On Jun 3, 2025, the Organization for Economic Co-operation and Development (OECD) (an international organization of 38 member countries that focuses on promoting economic growth) downgraded its growth forecasts for both the U.S. and global economy. Per OECD, U.S. economic growth is likely to experience major slowdown this year, with GDP dramatically slowing due to the impact of new tariffs and uncertainty. GDP growth is forecast to slide to 1.6% in 2025 and 1.5% next year, a sharp reduction from the 2.8% growth recorded last year. According to the group, the Trump administration's policies — imposing new import duties on nearly every foreign nation — have driven the effective tariff rate up to 15.4% from just 2% last year, the highest level since 1938. Since tariffs are paid by U.S. importers such as Walmart, the added costs are normally passed on to consumers through higher prices — leading the OECD to project that U.S. inflation will 'spike in mid-2025' and climb to 3.9% by year's Consumer Price Index rose by 2.3% in April, without the impact of tariffs. The OECD's inflation outlook shows a stark contrast between the United States and several other major economies around the world. For instance, while G20 countries are now expected to record 3.6% inflation in 2025 — down from 3.8% in March's estimate — the projection for the United States has risen to 3.2%, up from a previous 2.8%. Overall, the report noted that the U.S. economy faces downside risks, including a sharper-than-expected slowdown in economic activity due to policy uncertainty, stronger inflationary pressures from rising tariffs, and the likelihood of significant corrections in financial markets. Against this backdrop, we highlight two exchange-traded funds (ETFs) that recently hit a 52-week high and offer protection against inflation. VanEck Real Assets ETF RAAX VanEck Real Assets ETF seeks long-term total return. The fund primarily allocates to exchange-traded products that provide exposure to real assets including resource assets: commodities, natural resource equities; income assets: REITs, Infrastructure, MLPs; and gold, which includes gold mining equities. Resource Assets take 44.90% of the fund, followed by income assets (28.14%) and gold and gold equities (26.35%). The fund charges 75 bps in fees and yields 1.74% annually. Astoria Real Assets ETF PPI The Astoria Real Assets ETF is an actively managed, broadly diversified ETF that seeks long-term capital appreciation in inflation-adjusted terms. The ETF invests 69% assets in the United States, followed by the U.K. (12%), and Japan (7%). Oil and Gas (20.8%), Investment Trust (12.5%), Banks (8.9%) and Aerospace & Defense (7.8%) take the top four spots in the fund. The fund charges 78 bps in fees and yields 1.35% the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report This article originally published on Zacks Investment Research ( Zacks Investment Research
CNBC
3 days ago
- Business
- CNBC
Oil prices slip as rising OPEC+ output, tariff fears weigh on outlook
Oil prices edged lower in early Asian trade on Wednesday, weighed down by a loosening supply-demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff tensions. Brent crude futures dipped 5 cents, or 0.1%, to $65.58 a barrel by 0040 GMT while U.S. West Texas Intermediate crude was at $63.32 a barrel, down 9 cents, or 0.1%. Both benchmarks climbed about 2% on Tuesday to a two-week high, supported by worries over supply disruptions from Canadian wildfires and expectations that Iran will reject a U.S. nuclear deal proposal that is key to easing sanctions on the major oil producer. "Despite fears over Canadian supply and stalled Iran-U.S. nuclear talks, oil markets are struggling to extend gains," said Tsuyoshi Ueno, senior economist at NLI Research Institute, adding that OPEC+ production increases were capping the upside. Ueno said hopes for progress in U.S.-China trade talks were overshadowed by profit-taking, as investors remained cautious over the broader economic fallout from tariffs. U.S. President Donald Trump and Chinese leader Xi Jinping will likely speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions. As the Trump administration pressed U.S. trading partners to provide their best offers by Wednesday, the protracted negotiations and moving deadlines have led economists to scale back growth forecasts. On Tuesday, the Organization for Economic Co-operation and Development (OECD) cut its global growth forecast as the fallout from Trump's trade war takes a bigger toll on the U.S. economy. Meanwhile, scores of wildfires have swept across Canada since the start of May, forcing thousands of evacuations and disrupting crude oil production in the country. U.S. crude stocks fell by 3.3 million barrels in the week ended May 30, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories rose by 4.7 million barrels and distillate stocks rose by about 760,000 barrels. A Reuters poll of nine analysts estimated an average draw of 1 million barrels in crude stocks. Official inventory data from the U.S. Energy Information Administration (EIA) is due on Wednesday.
Japan Today
3 days ago
- Business
- Japan Today
Trade war cuts global economic growth outlook: OECD
The global economic outlook 'is becoming increasingly challenging' following Trump's tariff blitz, the OCED warns By Ali BEKHTAOUI The OECD slashed its annual global growth forecast on Tuesday, warning that U.S. President Donald Trump's tariffs blitz would stifle the world economy -- hitting the United States especially hard. After 3.3-percent growth last year, the world economy is now expected to expand by a "modest" 2.9 percent in 2025 and 2026, the Paris-based Organization for Economic Co-operation and Development said. In its previous report in March, the OECD had forecast growth of 3.1 percent for 2025 and 3.0 percent for 2026. Since then, Trump has launched a wave of tariffs that has rattled financial markets. "The global outlook is becoming increasingly challenging," said the OECD, an economic policy group of 38 mostly wealthy countries. It said "substantial increases" in trade barriers, tighter financial conditions, weaker business and consumer confidence, and heightened policy uncertainty will all have "marked adverse effects on growth" if they persist. The OECD downgraded its 2025 growth forecast for the United States from 2.2 percent to 1.6 percent. The world's biggest economy is expected to slow further next year to 1.5 percent. Trump, who has insisted that the tariffs would spark a manufacturing revival and restore a U.S. economic "Golden Age", posted on his Truth Social platform before the OECD report's publication: "Because of Tariffs, our Economy is BOOMING!" The OECD holds a ministerial meeting in Paris on Tuesday and Wednesday. U.S. and EU trade negotiators are expected to hold talks on the sidelines of the gathering after Trump threatened to hit the European Union with 50-percent tariffs. The Group of Seven advanced economies is also holding a meeting focused on trade. "For everyone, including the United States, the best option is that countries sit down and get an agreement," OECD chief economist Alvaro Pereira said in an interview with AFP. "Avoiding further trade fragmentation is absolutely key in the next few months and years," Pereira said. Trump imposed in April a baseline tariff of 10 percent on imports from around the world. He unveiled higher tariffs on dozens of countries but has paused them until July to allow time for negotiations. The U.S. president has also imposed 25-percent tariffs on cars and now plans to raise those on steel and aluminium to 50 percent on Wednesday. In the OECD report, Pereira warned that "weakened economic prospects will be felt around the world, with almost no exception". He added that "lower growth and less trade will hit incomes and slow job growth". The outlook "has deteriorated" in the United States after the economy expanded by a robust 2.8 percent last year, the report said. The effective tariff rate on U.S. merchandise imports has gone from two percent in 2024 to 15.4 percent, the highest since 1938, the OECD said. The higher rate and policy uncertainty "will dent household consumption and business investment growth", the report said. The OECD also blamed "high economic policy uncertainty, a significant slowdown in net immigration and a sizeable reduction in the federal workforce". While annual inflation is expected to "moderate" among the Group of 20 economies to 3.6 percent in 2025 and 3.2 percent in 2026, the United States is "an important exception". U.S. inflation is expected to accelerate to just under four percent by the end of the year, two times higher than the Federal Reserve's target for consumer price increases. The OECD slightly reduced its growth forecast for China -- which was hit with triple-digit U.S. tariffs that have been temporarily lowered -- from 4.8 to 4.7 percent this year. Another country with a sizeable downgrade is Japan. The OECD cut the country's growth forecast from 1.1 percent to 0.7 percent. The outlook for the eurozone economy, however, remains intact at one-percent growth. "There is the risk that protectionism and trade policy uncertainty will increase even further and that additional trade barriers might be introduced," Pereira wrote. "According to our simulations, additional tariffs would further reduce global growth prospects and fuel inflation, dampening global growth even more," he said. © 2025 AFP
Global News
3 days ago
- Business
- Global News
Amid the trade war, OECD has lowered its global economic growth projections
The current trade war sparked by U.S. President Donald Trump's tariff policies is expected by many experts to have wide-ranging impacts across the world, including on economic growth and labour markets, and a new report has been released that further highlights this warning. The Organization for Economic Co-operation and Development's latest outlook report outlines its dim forecast for global economies as well as key areas to help revive growth. The group of 38 countries changed its outlook to reflect a worse-than-expected path for global economies compared with a previously released report. 'In this challenging and uncertain environment, we have downgraded our growth projections,' the report says. 'Weakened economic prospects will be felt around the world, with almost no exception. Lower growth and less trade will hit incomes and slow job growth.' The OECD now says economic growth is expected to decline from 3.3 per cent in 2024 to 2.9 per cent this year and in 2026. Story continues below advertisement In its last report from March, growth for this year and next year was projected to be 3.1 per cent. 1:55 Tariff fears boost Canada's Q1 exports but hurt consumer spending Among the nations highlighted, the United States, Canada, Mexico and China are expected to be the biggest contributors to the global economic decline. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy The OECD sent out a separate report on May 26 featuring the economic survey for Canada, which said that although there would be an economic decline this year, there may not be a recession. The report says 'protectionism' will put pressure on inflation — meaning costs for goods and services will rise. This suggests Trump's goal of producing more goods and services for Americans within the United States by imposing tariffs on imports from other nations will likely have negative impacts on its own as well as global economies. Story continues below advertisement Warnings for global economies have been echoing for several months as the trade war has developed, with TD Bank saying Canada will be in a recession this year unless government policy is able to mitigate the damage from Trump's tariffs. When inflation gets too high, central banks will usually counteract those price pressures by increasing interest rates, which can mean higher monthly costs for many. The Bank of Canada did so starting in 2022 when inflation, measured by the consumer price index, hit a multi-year high as a ripple effect of the COVID-19 pandemic. The OECD suggests that in response to inflation pressures, central banks like the Bank of Canada 'should remain vigilant.' On Wednesday, the Bank of Canada will set monetary policy, and although no interest rate hikes are expected this time, if inflation does spike in the near future, then there is the potential to return to a period of higher borrowing costs again. 2:11 King Charles outlines federal government's vision in throne speech There is also the added risk that these tariffs pose for developing nations if governments are deep in debt. Story continues below advertisement 'High debt levels and tighter financial conditions pose particular risks for developing countries, many of which have large debt refinancing needs in the near future,' the OECD says, adding that 'countries should ensure that public debt is, indeed, on a sustainable path.' The final suggestion outlined in the OECD report is to increase investments that will lead to stronger business development, and if governments are in debt, that may make it more difficult to finance future projects. 'Boosting investment will be instrumental to revive our economies and improve public finances.' Prime Minister Mark Carney campaigned during the April election on plans to bolster the Canadian economy in the face of the trade war and increase spending to help diversify trading partners outside of the United States. One of the other ways Carney has been working to mitigate the damage from the trade war is to make it easier for the provinces and territories to do business with each other, starting by removing federally regulated interprovincial trade barriers. The prime minister met with the provincial premiers on Monday to discuss these changes, including for the energy sector, although the meeting showed that premiers believe more work needs to be done. 'Sluggish investment has lowered growth, productivity, and living standards,' the OECD report says, adding that 'governments should work together to tackle uncertainty and pursue reforms to foster growth and jobs.'
Yahoo
3 days ago
- Business
- Yahoo
Debt and trade issues weaken UK growth, OECD says
UK economic growth will suffer because of US tariff barriers and high interest payments on government debt, an influential global policy group has said. The Organization for Economic Co-operation and Development (OECD) cut its expectations for UK growth this year to 1.3% from the 1.4% it had predicted in March. The think tank has cut forecasts globally due to trade tensions, but said the UK faced particular issues due to its "very thin" buffer in public finances, calling on Chancellor Rachel Reeves to boost tax take and cut spending. "Strengthening the public finances remains a priority... including through the upcoming Spending Review," the OECD said. Next week, Reeves will set out her Spending Review where she faces tough choices on allocating departmental budgets. The government has already committed billions of pounds to defence, while the NHS is also expected to be a focus amid Labour's pledge to reduce waiting lists. In March, Reeves was forced to announce £14bn in measures, including £4.8bn in welfare cuts, to restore headroom against her self-imposed fiscal rules. While the OECD highlighted better-than-expected UK economic growth, which strengthened to 0.7% between January and March, it cautioned that "momentum is weakening" due to "deteriorating" business sentiment. It forecast the UK economy would expand by 1% in 2026, compared to the 1.2% it pencilled in a few months ago. "The state of the public finances is a significant downside risk to the outlook if the fiscal rules are to be met," the OECD said. It suggested that Reeves should adopt a "balanced approach" of "targeted spending cuts" and tax increases to improve the UK's public finances. It suggested closing tax loopholes and re-evaluating council tax bands based on updated property values. Under the current system, council tax in England is calculated based on the price the property would have sold for in April 1991. For Wales, it is evaluated on property prices in April 2003. Meanwhile, worldwide growth is now expected to slow to a "modest" 2.9%, down from a previous forecast of 3.1%, the OECD said. It blamed a "significant" rise in trade barriers and warned that "weakened economic prospects will be felt around the world, with almost no exception". The OECD's comments come as Bank of England governor Andrew Bailey told a Treasury Select Committee on Wednesday that the global system of trade agreements had been "blown up to a considerable degree" by global trade tensions. Since US President Donald Trump returned to the White House, a long list of countries have been targeted by tariffs, but Trump's unpredictable approach to implementing the measures has created widespread uncertainty. "We are forecasting basically a downgrade for almost everybody," Alvaro Pereira, the OECD's chief economist told the BBC. "We'll have a lot less growth and job creation than we had forecasted in the past." The group also slashed the outlook for the US economy this year from 2.2% to 1.6% and predicted growth would slow again in 2026. It warned that the US was at risk from rising inflation, something that Trump repeatedly promised would fall during his presidential campaign. Prior to the release of the OECD report on Tuesday, Trump wrote on social media: "Because of Tariffs, our Economy is BOOMING!" However, the most recent official data showed the US economy shrank at an annual rate of 0.2% in the first three months of this year, the first contraction since 2022. What tariffs has Trump announced and why? US to double tariffs on steel and aluminium imports to 50%, Trump says China says US has 'severely violated' tariffs truce
