By: Gustian Farrow, Head of StoneX TV • Content Channels
The IMF has cut its US growth forecast, Powell is walking a tightrope, and Treasury markets are signaling deeper cracks. Kathryn Rooney Vera, StoneX Chief Market Strategist, breaks down the macro forces driving market repricing.
See our financial videos hubThe IMF now expects US growth of 1.8% in 2025, but that is generous. Rooney Vera puts the ceiling closer to 1.5%—if that. “Soft data is already showing clear signs of deceleration,” she says. “The hard data will catch up. Durable goods, capital goods—these flow straight into GDP.” With services weakening and consumption rolling over, she sees greater than a 50% chance of recession this year.
Yields are pushing higher while the dollar drifts lower—an unusual pairing that points to deeper issues. “We’re seeing a structural shift,” says Rooney Vera. “Foreign central banks aren’t the marginal buyers anymore. It’s the private sector now—more price-sensitive, more reactive.” That shift, combined with persistent issuance and fiscal profligacy, is keeping the long end under pressure.
Tariffs are doing more harm than good, Rooney Vera argues. Despite being pitched as reciprocal, they are adding friction and driving down corporate investment and consumer sentiment. “We probably are going to see a recession because of what’s going on,” she warns, citing weakness in ISM data and consumer confidence.
The trade backdrop is deteriorating. “We’re well past the point of reciprocal tariffs,” Rooney Vera notes. “We’ve entered a new phase—policy uncertainty is holding back corporate investment and hitting consumer sentiment. That’s what’s feeding through to the macro data.”
There’s been fresh noise around Fed independence, but Rooney Vera says Powell will not be fired. “He’ll serve out his term, then be replaced,” she says. The real issue isn’t the rhetoric—it’s the policy contradictions. “The same policies meant to lower rates are actually pushing them up. You want a more affordable economy, but right now, creating the opposite.”
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--- Written by Gus Farrow
--- Expert: Kathryn Rooney Vera, StoneX Chief Market Strategist
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