DWS Investment Outlook for the Second Half: Tariffs Will Increase U.S. Inflation Rate, Gold Welcomes New Opportunities
DWS Asset Management released its investment outlook for the second half of 2025, predicting that the U.S. inflation rate will rise to around 4% due to increased tariffs, with GDP growth of 1.2% (2025) and 1.3% (2026). It advises investors to adopt a diversified portfolio, focusing on medium-term interest rates and high-quality euro credit, with a preference for the healthcare and communication services sectors. Gold, as a safe-haven asset, is expected to benefit from the trend of de-dollarization and will encounter new opportunities. Infrastructure investment and grid upgrades will become key areas of focus in the future
According to the Zhitong Finance APP, DWS Asset Management has released its investment outlook for the second half of 2025. DWS Asia Pacific Chief Investment Officer Eddie Wu stated that the forecast for U.S. GDP growth is 1.2% in 2025 and 1.3% in 2026. As consumers cut spending and investments are delayed, uncertainty has intensified growth pressures. She pointed out that starting from the second half of 2025, tariffs will raise the U.S. inflation rate, expected to peak at around 4%. The Federal Reserve may pause interest rate cuts until the second-round effects are ruled out, and then gradually reduce rates to neutral.
In terms of investment, Eddie Wu suggested a diversified portfolio to withstand the uncertain environment. Maintain a neutral bond duration, reducing risk from +1 to neutral. In fixed income, focus on medium-term interest rates and high-quality euro credit (euro investment grade). In equities, she is optimistic about Japan while holding a neutral stance on other regions. She is bullish on healthcare and communication services sectors. Gold, as a safe-haven trade, maintains the company's long position in euros against the dollar.
Eddie Wu indicated that after experiencing a very strong decade, stock markets are expected to achieve slightly lower returns over the next ten years. After a lost decade, bonds may offer decent returns. As for cross-assets, the relative attractiveness of bonds versus stocks makes diversification key.
DWS Global Liquidity Real Assets Expert Director Shen Kaiqi stated that under the new normal of interest rates, infrastructure and gold are ushering in new opportunities. Looking ahead to 2025, the future of infrastructure will show deep integration across sectors, with power generation accelerating to reach its highest level in over 20 years by 2029. Upgrading and expanding the power grid will become a key area for global capital. As energy demand continues to grow, natural gas consumption is expected to rise, playing a key role in promoting the development of renewable energy.
Shen Kaiqi noted that de-dollarization is driving gold prices higher, as international reserves shift away from the dollar, and central banks' strategic gold purchases are boosting demand. Recently, gold prices have risen while gold mining costs have decreased, leaving room for miners to catch up
