In October 2025, the global economy, particularly in G7 nations, continues to experience robust growth driven by aggressive fiscal and monetary policies. Despite persistent inflation and high debt levels, countries are maintaining loose monetary stances, propelled by enthusiasm around artificial intelligence and strong stock markets.
Japan, for instance, is turning toward more fiscal stimulus following the surprise election of Sanae Takaichi as head of the ruling Liberal Democratic Party. This shift is expected to lean against further Bank of Japan rate rises and in favor of increased fiscal spending.
In the United States, the Federal Reserve is anticipated to cut rates further to 3.5% by year-end, even with inflation nearing 3%. This decision aligns with President Trump's fiscal package, which includes tax cuts and deregulation, fueling 4% growth.
Germany is also expanding its fiscal policy, launching a massive spending program, while France is running large deficits. These measures, along with significant investments in AI and defense, are boosting global demand.
Despite concerns about inflated asset values and potential bubbles, investors are channeling funds into both equities and inflation hedges like gold. Bond markets are reacting with steepening yield curves. While AI-driven productivity gains could ease inflation pressures, this optimism remains speculative. With no major economy willing to restrain growth, global policy signals are firmly set to "go."
## Global Economy Maintains Aggressive Growth Amid Persistent Inflation:
– [Forget recession, world economy is being run 'hot'], Published on Tuesday, October 07