Crédit Mutuel AM: Back to business

Crédit Mutuel AM: Back to business

8 september 2025

Politiek

Politics is the central theme of this period, both in the United States and in Europe.

In France, the current scenario strongly reminds us of the situation at the end of 2024, marked by the fall of the Barnier government. The result should be similar with a new government that will likely opt for a less ambitious economic policy than expected, and thus a country that will continue to face high deficits, low growth and political instability.

It is difficult to be very positive in this environment, even though current expectations already seem to reflect a possible deterioration in the sovereign rating. We were cautious on French assets in the past months, and we maintain this positioning but without referring to a disaster scenario. A resignation of Emmanuel Macron or a new dissolution seem unlikely to us at this stage.

In the United States, politics are also the main theme, between tariff wars, appointment of the Fed or attempts to negotiate a peace agreement with Russia. It is difficult to have a lot of certainty, but in the end, we think there are too many similarities with the situation in the fall of 2024.

Last September, we thought that expectations for Fed rate cuts seemed overstated to us, given the healthy state of the US economy, despite the risks in the labor market. This is still the case this year: fairly reassuring figures on activity, a consumption that continues and should stay on the same level and, in addition, a significant inflationary risk. The leading indicators are converging towards higher prices, exacerbated by tariffs, the cost of which will be largely paid by the final consumer.

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