Macro Outlook: Cautiously constructive

Barclays Global Macro Outlook special report "Cautiously constructive". The headlines have turned more ominous, but the underlying drivers of growth remain intact. As long as AI-related investment, US corporate profitability, and consumer spending continue to beat expectations, the economy and markets seem capable of absorbing tighter central banks and higher rates. Bond yields are materially higher, central banks have resumed tightening (the Fed hiked 25bp in September with further hikes expected, the BoJ raised its policy rate to 1.25%, and the ECB hiked unanimously), and energy prices remain elevated with the US-Iran standoff unresolved, yet growth has held up. US Q3 GDP is tracking above 2% on resilient consumer spending and a healthy labour market; the euro area surprised on the upside with 0.6% q/q growth in Q2, the strongest in four years;