May 22, 2025 • 10 mins
In this episode of Paramount Wealth Perspectives, host Chris Coyle sits down with Chief Investment Officer Scott Tremlett to unpack the latest movements in global economic rankings as of May 14, 2025. They explore why India now leads the world in growth momentum, how rising tariffs are fueling inflation and complicating Fed policy, and why developed international markets may offer better value than U.S. equities. Scott also shares his latest portfolio positioning insights, emphasizing selectivity, private credit, and infrastructure as key themes amid an increasingly uncertain macro backdrop. Tune in for sharp insights, strategic takeaways, and what investors should focus on for the rest of 2025.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Chris Coyle (00:00):
Intro song
Hello everyone.
Welcome to Paramount WealthPerspectives, your go-to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
(00:22):
I am the marketing director hereat Paramount Associates Wealth
Management, and I'm joined byScott Tremlett, chief Investment
Officer at Paramount AssociatesWealth Management.
Today we're diving into the keytakeaways from our latest market
overviews as of May 14th, 2025.
Global rankings are shifting,tariffs are heating up and
monetary policy divergence ischanging the game for investors.
(00:47):
Let's frame this through fourbig questions, but before we do,
I'd like to take a minute toexplain what goes into our
Paramount global rankings.
Our proprietary economic rankingmodel starts with a deep dive
into growth using indicatorslike retail sales.
Employment and leading economicsignals to assess both current
(01:07):
strength and momentum acrosseconomies.
We then apply a monetary policyoverlay to factor in central
bank actions, adjusting forwhether policy is acting as a
tailwind or headwind.
Finally, we layer in marketvaluations to determine where
risk and reward are mostcompelling, ensuring we're not
just chasing strength that'salready priced in in this
(01:31):
three-tiered approach.
Which helps us identify not onlywhere economies are today, but
where they're heading and how tobest position around them.
It's a disciplined, data-drivenframework that blends macro
insights with market realities.
With that understanding, I'dlike to start with my first
question.
I.
Scott, what is driving thechanges in global economic
(01:53):
rankings and why has Indiaemerged as the top performer?
Thanks, Chris.
Yes.
India does currently hold thenumber one global ranking.
In fact, I looked over the lasttwo and a half years and there
was only one month that it fellfrom the number one spot, and
that was all the way down tonumber three.
This time it's really driven byboth.
Current economic strength andpositive momentum.
(02:16):
Consumer inflation in Indiadropped to 3.1% in April.
That's the lowest level since2019.
Thanks largely to 11% year overyear decline in vegetable
prices.
This disinflation trend hasallowed the Reserve Bank of
India to cut rates twice,bringing the benchmark rate to
6%, and really a shift to moreof an accommodative stance.
(02:39):
They are signaling that theywill provide further support if
needed.
But let's keep in mind that, andwhen it comes to inflation,
India's okay with inflation fromfour to 6%.
So obviously then pure numbers,3.1% is below that number.
India really does have acompetitive advantage versus
many countries when it comes totariffs.
(03:00):
They're more insulated fromtariff issues than other Asian
countries, really due to strongdomestic consumption.
Meanwhile.
Australia ranked secondbenefiting from broad based
economic expansion.
Though its growth remains modestat about 1.5% expected this
year, China ranks thirdsupported by strong
(03:20):
manufacturing and services, aswell as rate cuts down to three
to 3.5% in response to US tradepressures.
The US on the other side.
Has slipped to ninth placereally hurt by momentum, weak
momentum despite solid currenteconomic performance,
particularly in services andretail sales.
(03:41):
Absolutely.
I agree.
Scott India's position at thetop makes perfect sense given
the combination of stronggrowth, momentum, and cooling
inflation, which has opened thedoor to meaningful policy
support the Reserve Bank's ratecuts.
And accommodative stance, giveit a unique edge right now,
especially compared to slowermoving economies like the US
(04:03):
where the momentum is clearlyfading.
Next question for you, Scott, ishow are tariffs affecting
inflation and monetary policy?
In the United States, tariffsare definitely playing a
significant role in in shapinginflation dynamics.
Right now, a Federal Reserveestimate shows that a 20
percentage point increase intariffs on Chinese goods alone
(04:24):
raise core goods and inflationby about 0.33 percentage points
in just three months.
With over half of the costs nowbeing passed on to consumers,
this is directly impactinghousehold budgets.
In fact, Yale Budget Lab.
Projects that US families willpay an average of$2,800 more in
2025 due to tariff relatedinflation.
(04:45):
Now, keep in mind this is verybifurcated, and what I mean by
that is that lower incomehouseholds are hurting more
because it takes more of theirincome to create the additional
$2,800 a year just to pay thebills.
But just to play a devil'sadvocate here, there are
potential tariff positives.
Imagine that.
(05:05):
Such as maybe revenue forspecific initiatives like
infrastructure projects ormanufacturing incentives.
Possible support for industriesin the US with less foreign
competition.
Possibly some would sayreassuring supply chains, but
that would take a lot of moneyand years to accomplish.
And of course negotiationleverage where it seems the
(05:28):
focus is with the tariffs tothis point, fed Chair Jerome
Powell has expressed concernthat new tariffs could delay the
path to 2% inflation targetpossibly postponing rate cuts
for up to a year, despiteinflation falling all the way
from, remember this 9% in 2022to roughly 2.3%.
(05:49):
Now the outlook now is, ispretty uncertain.
Persistent wage growth at 3.4%.
Strong consumer spending andsupply chain disruptions are all
factors contributing tounderlying inflation pressure at
this point.
And as a result, the Fed isexpected to cut rates only once
in 2025, if at all.
You make a critical point there,Scott.
(06:11):
Tariffs are both a geopoliticaltool and a key inflation driver.
Directly affecting consumerwallets and therefore fed policy
with families potentially payingnearly$3,000 more this year, and
rate cuts being pushed outfurther into the future.
It's clear that trade policy isshaping the macro landscape as
much as monetary policy rightnow.
(06:34):
My third question for you,Scott, is related to
international markets.
Do they present betterinvestment opportunities than in
the United States currently?
Well, before I discusspositioning, let me mention that
investors should speak withtheir advisor, or better yet,
give us a call beforeimplementing any investment
strategy.
But yes, Chris, there areopportunities abroad and I have
(06:57):
adjusted positioningaccordingly.
The US market while resilient.
Now faces valuation headwinds.
US stocks recently have tradedat almost 70% premiums over
non-US equities.
This compares to a historicalaverage of 20 to 40%, and that
makes international markets moreattractive simply from a
relative valuation standpoint.
(07:19):
Year to date.
Developed international marketsmeasured by the MSCI EFI Index
are up over 10% while the s andp 500 is now down again for the
year.
Accommodated essential banks,lower earnings expectations and
currency advantages are fuelinginternational performance.
I have shifted to overweightdeveloped international
(07:40):
equities, especially in marketswhere monetary and fiscal policy
are aligned with growth goals.
Emerging markets are now equalweight.
With cautious optimism towardChina's fiscal stimulus and
sustained strength over inIndia.
Absolutely that shifts makessense to me, Scott, when US
equities are trading at a 70%premium to international peers,
(08:04):
the valuation gap alonejustifies some rebalancing, at
least with developedinternational markets
outperforming and policytailwinds supporting growth
abroad.
Tilting toward those regions isboth a tactical and I would say
fundamentally sound move.
And now for my final questionwith rising macro risks, what's
(08:25):
the most strategic approach toportfolio positioning for the
rest of 2025?
In one word, selectivity.
Broad market gains may slow.
So the emphasis shifts thesectors and securities with
durable fundamentals.
I'm currently underweight USequities, citing overvaluation
and slowing economic momentum.
(08:46):
Overall.
On the fixed income side, I'munderweight US treasuries.
I.
And definitely underweightpublic corporate bonds.
I do favor private creditinstead for its stronger yield
potential.
In this elevated rateenvironment that we're in
currently, credit markets areforcing more, and I would call
it lateral thinking.
I see infrastructure as a betteralternative to traditional
(09:08):
bonds.
These assets often outperform inhigh rate environments thanks to
inflation.
Link revenue streams on theequity front.
Stock picking is definitelycritical.
Look for companies with pricing,power, earnings, resilience, and
strategic sector placement.
My projection still stands forthe s and p 500 by year end to
(09:30):
61, 75 to 63 50 up about five to7% from current levels.
Risks are definitely growing tothe downside of that range.
Upside is limited.
By valuation concerns, policyuncertainty, and global slowdown
risks.
The smart move now is to focuson fundamentals, not
(09:52):
speculation, and to diversifyinto regions and sectors with
favorable policy and valuation,tailwinds and not headwinds.
I concur, Scott.
This is a market whereselectivity matters more than
ever.
And focusing on quality assetslike private credit
infrastructure and fundamentallystrong equities is key to
(10:13):
navigating limited upside andrising macro risks.
Well, I really appreciate youtaking the time to share your
insights.
Scott, I also want to thank allof our listeners for tuning in.
And remember, if you have aquestion you would like to hear
our perspective on, pleasesubmit them via email to
general@paramountassoc.com.
(10:35):
For now, stay informed.
Stay ahead and join us next timefor more key updates shaping the
global economy.
Intro song
Hello everyone.
Welcome to Paramount WealthPerspectives, your go-to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
(00:22):
I am the marketing director hereat Paramount Associates Wealth
Management, and I'm joined byScott Tremlett, chief Investment
Officer at Paramount AssociatesWealth Management.
Today we're diving into the keytakeaways from our latest market
overviews as of May 14th, 2025.
Global rankings are shifting,tariffs are heating up and
monetary policy divergence ischanging the game for investors.
(00:47):
Let's frame this through fourbig questions, but before we do,
I'd like to take a minute toexplain what goes into our
Paramount global rankings.
Our proprietary economic rankingmodel starts with a deep dive
into growth using indicatorslike retail sales.
Employment and leading economicsignals to assess both current
(01:07):
strength and momentum acrosseconomies.
We then apply a monetary policyoverlay to factor in central
bank actions, adjusting forwhether policy is acting as a
tailwind or headwind.
Finally, we layer in marketvaluations to determine where
risk and reward are mostcompelling, ensuring we're not
just chasing strength that'salready priced in in this
(01:31):
three-tiered approach.
Which helps us identify not onlywhere economies are today, but
where they're heading and how tobest position around them.
It's a disciplined, data-drivenframework that blends macro
insights with market realities.
With that understanding, I'dlike to start with my first
question.
I.
Scott, what is driving thechanges in global economic
(01:53):
rankings and why has Indiaemerged as the top performer?
Thanks, Chris.
Yes.
India does currently hold thenumber one global ranking.
In fact, I looked over the lasttwo and a half years and there
was only one month that it fellfrom the number one spot, and
that was all the way down tonumber three.
This time it's really driven byboth.
Current economic strength andpositive momentum.
(02:16):
Consumer inflation in Indiadropped to 3.1% in April.
That's the lowest level since2019.
Thanks largely to 11% year overyear decline in vegetable
prices.
This disinflation trend hasallowed the Reserve Bank of
India to cut rates twice,bringing the benchmark rate to
6%, and really a shift to moreof an accommodative stance.
(02:39):
They are signaling that theywill provide further support if
needed.
But let's keep in mind that, andwhen it comes to inflation,
India's okay with inflation fromfour to 6%.
So obviously then pure numbers,3.1% is below that number.
India really does have acompetitive advantage versus
many countries when it comes totariffs.
(03:00):
They're more insulated fromtariff issues than other Asian
countries, really due to strongdomestic consumption.
Meanwhile.
Australia ranked secondbenefiting from broad based
economic expansion.
Though its growth remains modestat about 1.5% expected this
year, China ranks thirdsupported by strong
(03:20):
manufacturing and services, aswell as rate cuts down to three
to 3.5% in response to US tradepressures.
The US on the other side.
Has slipped to ninth placereally hurt by momentum, weak
momentum despite solid currenteconomic performance,
particularly in services andretail sales.
(03:41):
Absolutely.
I agree.
Scott India's position at thetop makes perfect sense given
the combination of stronggrowth, momentum, and cooling
inflation, which has opened thedoor to meaningful policy
support the Reserve Bank's ratecuts.
And accommodative stance, giveit a unique edge right now,
especially compared to slowermoving economies like the US
(04:03):
where the momentum is clearlyfading.
Next question for you, Scott, ishow are tariffs affecting
inflation and monetary policy?
In the United States, tariffsare definitely playing a
significant role in in shapinginflation dynamics.
Right now, a Federal Reserveestimate shows that a 20
percentage point increase intariffs on Chinese goods alone
(04:24):
raise core goods and inflationby about 0.33 percentage points
in just three months.
With over half of the costs nowbeing passed on to consumers,
this is directly impactinghousehold budgets.
In fact, Yale Budget Lab.
Projects that US families willpay an average of$2,800 more in
2025 due to tariff relatedinflation.
(04:45):
Now, keep in mind this is verybifurcated, and what I mean by
that is that lower incomehouseholds are hurting more
because it takes more of theirincome to create the additional
$2,800 a year just to pay thebills.
But just to play a devil'sadvocate here, there are
potential tariff positives.
Imagine that.
(05:05):
Such as maybe revenue forspecific initiatives like
infrastructure projects ormanufacturing incentives.
Possible support for industriesin the US with less foreign
competition.
Possibly some would sayreassuring supply chains, but
that would take a lot of moneyand years to accomplish.
And of course negotiationleverage where it seems the
(05:28):
focus is with the tariffs tothis point, fed Chair Jerome
Powell has expressed concernthat new tariffs could delay the
path to 2% inflation targetpossibly postponing rate cuts
for up to a year, despiteinflation falling all the way
from, remember this 9% in 2022to roughly 2.3%.
(05:49):
Now the outlook now is, ispretty uncertain.
Persistent wage growth at 3.4%.
Strong consumer spending andsupply chain disruptions are all
factors contributing tounderlying inflation pressure at
this point.
And as a result, the Fed isexpected to cut rates only once
in 2025, if at all.
You make a critical point there,Scott.
(06:11):
Tariffs are both a geopoliticaltool and a key inflation driver.
Directly affecting consumerwallets and therefore fed policy
with families potentially payingnearly$3,000 more this year, and
rate cuts being pushed outfurther into the future.
It's clear that trade policy isshaping the macro landscape as
much as monetary policy rightnow.
(06:34):
My third question for you,Scott, is related to
international markets.
Do they present betterinvestment opportunities than in
the United States currently?
Well, before I discusspositioning, let me mention that
investors should speak withtheir advisor, or better yet,
give us a call beforeimplementing any investment
strategy.
But yes, Chris, there areopportunities abroad and I have
(06:57):
adjusted positioningaccordingly.
The US market while resilient.
Now faces valuation headwinds.
US stocks recently have tradedat almost 70% premiums over
non-US equities.
This compares to a historicalaverage of 20 to 40%, and that
makes international markets moreattractive simply from a
relative valuation standpoint.
(07:19):
Year to date.
Developed international marketsmeasured by the MSCI EFI Index
are up over 10% while the s andp 500 is now down again for the
year.
Accommodated essential banks,lower earnings expectations and
currency advantages are fuelinginternational performance.
I have shifted to overweightdeveloped international
(07:40):
equities, especially in marketswhere monetary and fiscal policy
are aligned with growth goals.
Emerging markets are now equalweight.
With cautious optimism towardChina's fiscal stimulus and
sustained strength over inIndia.
Absolutely that shifts makessense to me, Scott, when US
equities are trading at a 70%premium to international peers,
(08:04):
the valuation gap alonejustifies some rebalancing, at
least with developedinternational markets
outperforming and policytailwinds supporting growth
abroad.
Tilting toward those regions isboth a tactical and I would say
fundamentally sound move.
And now for my final questionwith rising macro risks, what's
(08:25):
the most strategic approach toportfolio positioning for the
rest of 2025?
In one word, selectivity.
Broad market gains may slow.
So the emphasis shifts thesectors and securities with
durable fundamentals.
I'm currently underweight USequities, citing overvaluation
and slowing economic momentum.
(08:46):
Overall.
On the fixed income side, I'munderweight US treasuries.
I.
And definitely underweightpublic corporate bonds.
I do favor private creditinstead for its stronger yield
potential.
In this elevated rateenvironment that we're in
currently, credit markets areforcing more, and I would call
it lateral thinking.
I see infrastructure as a betteralternative to traditional
(09:08):
bonds.
These assets often outperform inhigh rate environments thanks to
inflation.
Link revenue streams on theequity front.
Stock picking is definitelycritical.
Look for companies with pricing,power, earnings, resilience, and
strategic sector placement.
My projection still stands forthe s and p 500 by year end to
(09:30):
61, 75 to 63 50 up about five to7% from current levels.
Risks are definitely growing tothe downside of that range.
Upside is limited.
By valuation concerns, policyuncertainty, and global slowdown
risks.
The smart move now is to focuson fundamentals, not
(09:52):
speculation, and to diversifyinto regions and sectors with
favorable policy and valuation,tailwinds and not headwinds.
I concur, Scott.
This is a market whereselectivity matters more than
ever.
And focusing on quality assetslike private credit
infrastructure and fundamentallystrong equities is key to
(10:13):
navigating limited upside andrising macro risks.
Well, I really appreciate youtaking the time to share your
insights.
Scott, I also want to thank allof our listeners for tuning in.
And remember, if you have aquestion you would like to hear
our perspective on, pleasesubmit them via email to
general@paramountassoc.com.
(10:35):
For now, stay informed.
Stay ahead and join us next timefor more key updates shaping the
global economy.
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