DWS held a press conference today (November 11) to unveil its investment outlook for the second half of the year, providing several forecasts regarding the global economic market, including Fed rate cuts, U.S.-China tariffs, and the likelihood of a U.S. economic recession. According to DWS Asia-Pacific Chief Investment Officer, Wu Shuangrong, the chance of a U.S. economic recession within the next 12 months is estimated to be around 15%.

Additionally, Wu predicts that the Fed will implement four rate cuts, reducing the current interest rate from the 4.25%-4.5% range to approximately 3.25%-3.5%. He also mentioned that the rise in U.S. tariffs is likely to push up inflation expectations, forecasting an inflation rate of 3.3% this year and 3.2% next year.

Wu emphasized that the Fed will face a tug-of-war between controlling inflation and preventing economic recession, while the pressure index on the financial system is also relatively high, although there remains distance from the pandemic and the 2008 financial crisis.

He anticipates that starting from the second half of this year, the inflation rate could rise to around 4% due to tariff impacts, alongside fiscal policies and a low immigration environment that may elevate inflation risks and even compel the Fed to make passive rate hikes. The market is currently paying close attention to the possibility of a U.S. economic recession, with DWS estimating the likelihood at just 15%. On the other hand, the forecast for U.S. tariffs on China stands at around 35%, while gold prices may have room to increase and could reach $3,700 within the next 12 months.