First Batch of September PMI Surveys, Fed Official Comments and the OECD Interim Global Economic Outlook

September 23, 2025

There was scant dollar movement overnight of 0.1% or less, and U.S. stock futures are also marking time ahead of a speech by Fed Chairman Powell. Share prices in the Pacific Rim closed up 1.0% in Japan, 1.4% in Taiwan and 1.1% in Indonesia but down by 0.7% in Hong Kong and 0.2% in China. Major European stock exchanges have strengthened 0.3-0.5%. Ten-year sovereign debt yields are steady in Germany, Japan, France, Spain and Italy but have slipped three basis points in Great Britain and two basis points in the United States. The prices of oil (+1.2%), gold (+1.1%) and Bitcoin (+0.3%) are each higher.

Chairman Powell’s speech is scheduled for 12:30 EDT. Meantime, the Cleveland and Atlanta Federal Reserve District presidents made comments striking a cautionary note. Hammack said inflation, which remains above target, continues to be a high priority, and Bostic doesn’t see a compelling need to cut the federal funds target during the final quarter of 2025.

The OECD’s September Interim Global Outlook says that the effects of higher tariffs are becoming increasingly evident and are still unfolding.

Global GDP growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 2.9% in 2026, as higher tariffs and ongoing policy uncertainty slow down investment and trade. The pace of disinflation has slowed in some economies, with goods prices edging higher and services inflation remaining stubborn.

Specific country slowdowns are forecast for the United States from a GDP rise of 2.8% last year to 1.8% this year and 1.5% in 2026; China to 4.4% next year from 5.0% last year; Russia from 4.3% last year to 1.0% this year and 2.7% in 2026; and Brazil where 3.4% growth in 2024 gets sliced in half to 1.7% next year. Among Group of Seven economies other than the United States, 2026 GDP growth is projected at 1.2% in Euroland, 1.1% in Japan, 1.4% in the U.K. and 1.1% in Canada. India continues to expand robustly next year at a projected 6.7%, but inflation there rises to 3.9%. U.S. CPI inflation of 2.7% this year and 3.0% in 2026 are both above last year’s performance and suggest a continuing elusive quest to restore the 2.0% targeted pace.

Results in today’s batch of September preliminary purchasing manager surveys are as follows:

In Euroland, the composite PMI of private sector activity edged 0.2 points higher to a 16-month high but, at 51.2, depicts an economy lacking serious forward momentum. While the service sector reading rose to a 9-month high of 51.4, but manufacturing is suffering amid tariff uncertainty and unexpectedly fell back from August’s 38-month high to an unexpected contractionary reading of 49.5.
Within the euro area, the private sector composite scores of Germany and France printed at a 16-month high of 52.4 and a 5-month low of 48.4, respectively.
Britain‘s preliminary September composite PMI dropped 1.4 index points to a 5-month lwo of 48.4. The readings for services of 48.9 and manufacturing of 48.1 were at 2- and 3-month lows and below street expectations.
Australia‘s composite PMI fell 3.4 points to a 3-month low of 52.1 in September. Both manufacturing (51.6) and services (52.0%) had lower readings than in August.
India‘s PMI scores in September were also below their August readings but still depicted very buoyant real activity. A composite score of 61.5 was only topped by August’s record peak of 63.2. Services stayed above the 60 threshold with a score of 61.6, and manufacturing printed at 58.5.

In central bank news today, the National Bank of Hungary again left its policy interest rate unchanged at 6.5%, which is half the 13.0% peak maintained from September 2022 until October 2023. The rate was slashed by 225 basis points in the final quarter of 2023 and an additional 425 bps during the first three quarters of 2024, but hasn’t been changed during the past year. Consumer price inflation in Hungary remains above the 2-4% target range and faces some upside risks that are concerning to monetary officials.

In Sweden where core CPI inflation of 3.2% exceeds the 2% target by the most in 19 months, the Riksbank Executive Board surprised analysts with a 25-basis point interest rate cut to 1.75% today. In justifying their decision, officials opined that “new information has given further reassurance regarding the assessment that the high inflation is transitory; growth has been weak for a long time, and the timing of the expected recovery has been gradually pushed forward. The turnaround on the labour market also appears to be taking longer than expected.” Anchoring inflation expectations, however, officials also signaled that the new 1.75% interest rate level, which is down from 4.0% maintained from September 2023 to May 2024, is unlikely to change again “for some time to come.”

U.S. current account data have been distorted severely by the roller-coaster ride of U.S. tariff policy. The front-loading of imports ahead of tariffs had ballooned the deficit to a record-shattering $440 billion in the first quarter, equivalent to 5.9% of GDP. Although greatly smaller at $251 billion in the second quarter, the current account deficit’s ratio to U.S. GDP of 3.3% again exceeded the 3% threshold and mere-matched the full-2023 result. The ratio of 4.6% in the first half of 2025 exceeds that of 3.9% in 2024 and all other years during the past decade.

The orders index of the Confederation of British Industry’s industrial trends survey in September (-27) was its least negative in the past five months.

Dutch revised GDP figures put growth in the second quarter 0.2% above the 1Q level but at a one-year low of 1.7% when compared to the year-earlier quarter. The 2Q current account of EUR 13.2 billion was down from EUR 20.4 billion a year earlier.

CPI inflation in Singapore last month slipped to a 35-month low of 0.5%, while Malaysian consumer price inflation ticked up 0.1 percentage point to a 4-month high of 1.3%.

Tags: OECD Interim Forecast, September 2025 PMI survey results, U.S. current account

This entry was posted
on Tuesday, September 23rd, 2025 at 6:29 am and is filed under New Overnight Developments Abroad – Daily Update, Uncategorized.
You can follow any responses to this entry through the RSS 2.0 feed.

You can leave a response, or trackback from your own site.

Source link