MNI BRIEF: Outlook Subject To Big Risks, Uncertainty -Panetta

The global macroeconomic outlook remains subject to substantial and difficult-to-quantify risks from U.S. trade policy and the potential escalation of the conflict between Israel and Iran, Bank of Italy Governor Fabio Panetta said in a speech on Wednesday.

An era characterised by instability and shocks since the 2008 Global Financial Crisis has led central banks to adopt a more data-dependent approach, Panetta said.

“Central banks have started to use forecasts more cautiously, integrating them with alternative analyses and indicators – particularly those relating to core inflation – and paying increasing attention to actual data”, Panetta said, adding that while AI might improve forecasting in the future the ability to provide an economic narrative will remain essential. (See MNI SOURCES: ECB Eyes July Pause, Tariffs Key To Cut Timing)