At the heart of global financial power, the Spring Meetings of the International Monetary Fund (IMF) and the World Bank are taking place this year under an unexpected shadow: the economic policy of President Donald Trump.

As soon as the event began in Washington, the IMF updated its growth forecast for the world economy in 2025 and the diagnosis was clear: the world will grow by only 2.8%, half a point less than in January. The main factor behind this slowdown, according to the organization, is the escalation of tariffs launched by the United States and the high political uncertainty it has generated.

"We are entering a period in which the global economic system that we have known for 80 years is being reset," warned Pierre-Olivier Gourinchas, IMF chief economist. "Beyond the massive tariff hike, uncertainty is weighing heavily on the economy and, if it continues, will slow global growth," he added at a press conference.

The IMF report, presented as part of these meetings, forecasts global trade in goods and services to grow by just 1.7%, compared to the 3.2% projected just three months ago. The United States will see its growth fall to 1.8% (-0.9 pp), while Mexico, one of the hardest hit by tariffs, will suffer a contraction of 0.3%.

Latin America and the Caribbean will grow by just 2.0% in 2025, dragged down by the slowdown in its northern partners. China, the main target of Trump's trade policy, will register its lowest expansion since 1990: barely 4% of GDP.

Only Spain partially escapes the global cooling, with an expansion of 2.5%, thanks to the strength of tourism and employment.

A president against his central bank

At the same time, President Trump has unleashed a new political firestorm by intensifying his attacks on Jerome Powell, chairman of the Federal Reserve, whom he accuses of not cutting interest rates aggressively enough.

On Monday, markets reacted with panic over the possibility of direct White House intervention at the Fed. Wall Street closed with a 2.5% drop in its main indexes. Although Trump stated hours later that he has "no intention of firing him," he called Powell a "big loser" and reiterated that it is "the perfect time" to lower rates. As a result, most markets responded bullishly on Tuesday.

Powell, for his part, has opted for caution, aware that a premature cut could trigger inflation, already under pressure from the effects of tariffs. The IMF estimates that inflation in the United States could remain at around 3% this year, above the central bank's target.

The IMF as a counterpoint

From the IMF, Kristalina Georgieva has tried to tone down immediate fears, stating that a global recession is not expected. But she has also made a strong call to preserve international cooperation, noting that protectionism and uncertainty are damaging not only projections, but the fundamentals of the global financial system.

"Rapidly escalating trade tensions and extremely high levels of policy uncertainty will have a major impact on global economic activity," the agency's baseline report states.

In addition, the IMF warned that uncertainty could make it more difficult for emerging countries to access debt markets, increasing the risk of a crisis in the medium term.

What now?

Despite the rebound of the markets after more conciliatory statements by the White House on the negotiations with China and the role of the FED, distrust persists. Treasury Secretary Scott Bessent tried to calm things down by assuring that a "de-escalation" of the trade conflict is expected, but the damage has already been done: volatility has settled in the markets and US leadership is being questioned at home and abroad.

The IMF and World Bank Spring Meetings have highlighted something that was already palpable in the markets: the global economy is being held hostage to U.S. domestic politics. And although a recession is ruled out for now, the risk of a deeper crisis is on the table.

The coming months will be key to see whether the White House moderates its discourse or, on the contrary, insists on the current course. The world is watching, and the markets are responding.

With information from AFP