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The Global Economy Is Holding Up

November 19, 2025

Time to Read: 2 minutes

This past year was rife with risks to the global economy: policy changes, tariff uncertainty and more. Yet, the global economy held up as manufacturing and services activity strengthened across the world.

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The global economy remained resilient this past year during a time of pronounced policy and tariff uncertainty, as well as geopolitical tensions. Yet, fiscal support, monetary easing and strong capital expenditures helped economies deliver positive growth.

A key measure of economic conditions, the Global Composite Purchasing Managers’ Index (PMI), a weighted average of the global manufacturing and services PMIs, provides a snapshot of overall worldwide economic health. A reading above 50 indicates economic expansion, while a reading below 50 suggests a contraction. This metric is at its highest since August 2024 and underpins our positive outlook for global growth as we head into 2026.

A strong global economy is important to investors because increased economic activity leads to higher corporate profits, boosting stock prices. It is one of the reasons we maintain a constructive view on equities and why diversification across regions remains important.

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Bullish on Fed Easing?

As expected, the Federal Open Market Committee delivered another 25-basis point rate cut. Investors are now focused on the pace of cuts from here. However, the more important driver of future equity returns is whether the Fed is easing into an economy that is growing or not.

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Good News on Inflation?

Last week’s Consumer Price Index report, a widely used indicator of inflation in the U.S. economy, showed growth of 3% in September, which was above 2.9% in August but less than expected.

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Bubble or Is This Market Different?

The market is paying up for future earnings, but are we in a bubble? Not in our view. Higher multiples are the new normal.

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