AI mania masks economic fissures and rising uncertainty

The tone and tenor in Washington, DC on the sidelines of the recent IMF-World Bank meetings revealed how divided and uncertain the policy, investor and analyst community remains. One would have presumed economic uncertainty would have peaked during the spring meetings in April, a few weeks after “Liberation Day”. The uncertainty then was deep, but narrow, concentrated on the scale and scope of the Trump tariffs. Now it has broadened ominously. Is the US economy on the verge of a recession or has it bucked one? Are the Trump tariffs even legal? Will the breathless AI build-out become progressively unviable? Are we playing with fiscal fire globally? Is the cherished independence of some central banks under existential threat?

Start with US economic performance. The Atlanta Fed Nowcaster sug