LONDON, May 23, 2025 — Global investors are navigating unprecedented uncertainty as erratic U.S. trade policies and unpredictable economic forecasts shake markets. Many admit placing long-term bets is more challenging now than during the 2020 COVID-19 crisis.

Concerns over a 90-day U.S.-China tariff truce, widening budget deficits, and volatile currencies have heightened investor caution. Markets have swung wildly in recent weeks, with world stocks rebounding 20% from lows reached after President Donald Trump's April 2 tariff announcement, only to fall sharply again amid fresh tariff threats on European Union goods.

"There is no macroeconomic visibility," said Francesco Sandrini, Italy chief investment officer at Europe's largest asset manager Amundi. He is focusing on short-term market trends rather than committing to a long-term outlook. "You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term."

Others have shifted portfolios to neutral positions, avoiding directional bets. Florian Ielpo, head of macro at Lombard Odier Investment Managers, said, "There is no reward for taking any risk at the moment."

John Roe, head of multi-asset funds at Legal & General Investment Management, described the current environment as the most unpredictable since the pandemic. Early this year, many economists modeled global recession risks linked to the trade war, only to revise forecasts following temporary tariff suspensions.

Anthony Willis, senior economist at Columbia Threadneedle Investments, noted that economic signals have become less clear since the pandemic. "We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," he said.

Joe Little, global chief strategist at HSBC Asset Management, expects continued sharp price swings. "This makes it very difficult in terms of running positions and maintaining conviction," he said.

Amundi's Francesco Sandrini warned of harmful market swings driven by debt-fueled speculation. Leveraged equity index funds hit record inflows in late April, while risky derivatives trading surged, raising concerns about market stability. 

César Pérez Ruiz, chief investment officer at Pictet Wealth Management, cautioned that the recent market rebound may have lured inexperienced traders who could panic in a downturn.

The Bank for International Settlements has noted that U.S. economic surprises cause amplified market responses abroad. Lombard Odier’s Florian Ielpo summed up the mood, "We need to acknowledge that what we know about investing does not apply at the moment."