Global Macro Insights: December 2025

Key takeaways

͏͏͏͏͏͏͏͏͏͏December overview: In economic news, data in developed markets generally remained somewhat mixed but with a softer undertone, and there are continued signs of moderation in the US economy. Across a number of economies, there is some evidence of unwinding of previous front-loading ahead of tariffs, particularly with respect to exports. Monetary policy actions across the globe included the US Federal Reserve (Fed) cutting interest rates and the Bank of Japan (BoJ) raising rates, while some emerging markets eased policy. Inflation data was somewhat mixed, with a downside surprise in the United States—possibly affected by data collection issues stemming from the government shutdown—but with some other developed economies continuing to show some pricing pressures. Inflation remains fairly contained among a variety of emerging markets (EM). The US dollar (USD) was weaker against most currencies in December, with the exception of the Japanese yen and a handful of EM currencies. Bond yields were generally higher during the month. Geopolitical news took center stage just after month-end, when US troops entered Venezuela and captured President Nicolás Maduro to stand trial in the United States.

Outlook: The recent geopolitical developments in Venezuela add to the global uncertainty that tariff policy initially sparked. Some market participants have raised questions about the implications for similar unilateral actions elsewhere (whether on the part of the United States or other countries). Financial markets also still await the Supreme Court ruling on the legality of tariffs imposed by the president rather than Congress; the ruling may take some months yet. While uncertainty remains on a number of fronts, in general we see global growth as being quite resilient. Over the medium term, our core themes of improving EM fundamentals, USD weakening and global rewiring (such as geopolitically induced shifts in global supply chains) remain intact. Although data has been fairly resilient to date, risks remain from US tariff and trade policy. In addition to this, domestic political developments are of potential concern in some countries, particularly with respect to fiscal policy outcomes. Elections are due in a number of countries this year, including Brazil, Colombia and Hungary.

Continue reading further by downloading the PDF, which highlights the Templeton Global Macro team’s market and economic overview, and outlook for the month.