Global Economy Briefing — July 25, 2026

Global economy: Wall Street consolidates, the dollar strengthens, and oil volatility lingers as the IMF downgrades 2026 global growth to 3.0%.

Rio Times Global Economy Briefing

The Big Three

• IMF trims 2026 global growth to 3.0% as energy shock bitesThe IMF projects global growth of 3.0% in 2026. Global inflation is forecast to rise to 4.7% before easing in 2027.
• Fed holds but stays hawkish, keeping dollar and yields elevatedThe Federal Reserve kept the federal funds target range at 3.50%–3.75%. Markets debate whether stubborn inflation will force a rate hike later in 2026.
• Wall Street pauses as breadth improves, signalling rotation not routThe S&P 500 is up 10.2% in the first half of 2026. A big Q2 rebound and small-cap outperformance signal improved risk appetite.

United States

Europe & United Kingdom

Asia-Pacific & Emerging Markets

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Global Markets — Live Board

| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| SPX | 7,412 | +0.05% | — | — | — | — | — |
| NDX | 28,128 | -1.15% | — | — | — | — | — |
| DJI | 51,947 | +0.46% | — | — | — | — | — |
| RUT | 2,930 | -0.35% | — | — | — | — | — |
| US10Y | 4.6790 | -0.51% | — | — | — | — | — |
| VIX | 18.58 | -0.64% | — | — | — | — | — |
| DAX | 25,099 | +1.36% | — | — | — | — | — |
| FTSE | 10,736 | +0.91% | — | — | — | — | — |
| CAC | 8,372 | +0.88% | — | — | — | — | — |
| STOXX | 644.51 | +0.82% | — | — | — | — | — |
| NIKKEI | 64,611 | -2.73% | — | — | — | — | — |
| HSI | 24,963 | -0.98% | — | — | — | — | — |
| KOSPI | 6,691 | -5.72% | — | — | — | — | — |
| CSI300 | 4,649 | -1.67% | — | — | — | — | — |
| NIFTY | 23,767 | -0.43% | — | — | — | — | — |
| TSX | 35,369 | +0.50% | — | — | — | — | — |
| GOLD | 4,071 | +0.60% | +22.10% | 4,047 | 4,085 | 4,024 | 112,402 |
| SILVER | 58.91 | +1.92% | +54.34% | 57.80 | 59.29 | 57.36 | 26,053 |

8 of 15names higher.

SILVERled, while

KOSPIlagged.

Global economy — Source: EODHD close, 2026-07-24.

01 Wall Street exhales, breadth broadens

U.S. equities head into the weekend having cooled from record territory. The S&P 500 is up 10.2% in the first half of 2026.

The equal-weighted index and small caps outperformed. This signals a healthier, more inclusive rally beneath the headline index.

The Nasdaq underperformed as investors questioned stretched AI valuations. The Dow, by contrast, eked out gains and notched an all-time closing high.

That rotation matters for Brazil and its neighbours. Global investors are rediscovering industrials, financials and commodities.

Beneath the equity surface, bond markets and the dollar are quietly enforcing discipline. The U.S. dollar strengthened 2.3% against a basket of currencies in June.

For LatAm FX this is a familiar squeeze. A firm dollar and high real U.S. yields narrow the room for local central banks to ease.

02 Fed’s hawkish hold keeps dollar and curves on edge

The Federal Reserve left its policy rate unchanged in June. It maintained the federal funds target range at 3.50%–3.75%.

Officials lifted their 2026 inflation projection and nudged down growth expectations. They acknowledged the energy shock could yet require additional tightening.

Markets are now debating whether the next move could be up. This shift helps explain why the dollar is firm and U.S. yields remain elevated.

The macro backdrop the Fed is watching is mixed rather than weak. U.S. real GDP grew at an annualised 2.1% in the first quarter.

Business investment contributed more to growth than the consumer. The labour market continues to cool only gradually, with unemployment in the low-4% region.

Inflation, however, has become more complicated. The Fed’s preferred PCE measure peaked around 3.8% annualised.

June’s surprise 0.4% month-on-month drop in headline CPI was driven largely by gasoline. It was not broad-based relief.

For Brazil and its neighbours, this is not a comfortable mix. A Fed that is on hold but leaning hawkish keeps global financial conditions tighter.

| Indicator | Actual | Prior | Verdict |
|---|---|---|---|
| Q1 2026 GDP (annualised) | 2.1% | prior ~3.4% in Q4 2025 | Stronger than feared; business investment leads, complicating disinflation. |
| Fed funds target range | 3.50%–3.75% (unchanged) | 3.50%–3.75% | Hawkish hold; door remains open to a 2026 hike, anchoring yields and dollar. |
| PCE inflation (Q2 peak) | peaked around 3.8% annualised | 4.1% in 2025 (IMF) | Re-acceleration versus disinflation trend keeps Fed reluctant to ease quickly. |
| June CPI m/m | -0.4% | +0.3% m/m prior | Gasoline-led decline masks sticky core pressures; Fed likely stays cautious. |
| Labour market | unemployment low-4% region | sub-4% in 2025 | Cooling gradually, supporting ‘no imminent recession’ narrative for now. |
| S&P 500 H1 2026 YTD | +10.2% | Q1 negative for majors | Big Q2 rebound and small-cap outperformance signal improved risk appetite. |

| Indicator | Actual | Prior | Verdict |
|---|---|---|---|
| Euro area 2026 GDP forecast | 0.9% (IMF) | 1.2% for 2027 | Stagflation-like trade-off limits scope for aggressive ECB easing. |
| ECB 2026 inflation projection | 3.0% (staff) | 2.6% prior | Higher energy costs push up forecast, keeping euro rates relatively firm. |
| UK Q1 2026 GDP | +0.6% q/q | +0.2% in Q4 2025 | Better start to year, but later data show momentum fading amid energy shock. |
| UK CPI (May) | 2.8% y/y; services 3.7% | 2.8% headline in April | Headline near target but sticky services and transport highlight domestic pressures. |
| BoE Bank Rate | 3.75% (7-2 vote to hold) | 3.75% | Hawkish: two members voted to hike to 4.00%, pushing back cut expectations. |

| Indicator | Actual | Prior | Verdict |
|---|---|---|---|
| Global growth 2026 (IMF) | 3.0% | 3.5% average 2024-25 | Downgrade reflects energy shock and geopolitical drag; risks tilted to downside. |
| Global inflation 2026 (IMF) | 4.7% | 4.1% in 2025 | Higher energy and food prices reverse part of the earlier disinflation trend. |
| Brent crude (IMF base case) | US$87/bbl end-2026 | US$74/bbl projected end-2027 | Persistently high oil is a tax on importers, a benefit for LatAm commodity exporters. |
| Japan 2026 GDP (IMF) | 0.6% | slightly higher 2025 growth | Weak momentum and rising inflation keep BoJ on slow normalisation path. |
| MSCI EAFE H1 2026 | +9.4% through June | flat in Q1 (approx) | Non-U.S. markets participate in rally but take cues from U.S. rates and dollar. |

| Instrument | Level | Session |
|---|---|---|
| S&P 500 (US) | 7,412 | +0.05% |
| Ibovespa (Brazil) | 174,042 | -1.52% |
| USD/BRL | 5.0873 | +0.06% |

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