Last week, the 51st edition of the Ambrosetti forum took place. Like in April, this edition took place during the middle of a number of geopolitical crises and macro-financial uncertainties that are currently taking place. In spite of these crises and uncertainties, the participants at the forum did not express a level of concern as high as had been the case in April.

The April edition, dedicated to financial themes, took place literally the day after “Liberation Day”, when US President Donald Trump shocked the world with his series of “reciprocal tariffs” that most market participants did not expect, and certainly that they did not understand, since there was nothing “reciprocal” in the way those tariffs were calculated. The reaction was that of despair, with a sharp fall in equity prices and also of the USD, which was losing credibility in the eyes of international investors. In reality, over the following days a sort of “EM-style” crisis took place, with investors selling US equities, bonds, credit and currencies all at the same time.

It took several months for the world to recover from that shock, and in particular it took a series of trade deals, which eventually were made between the US and some of its most relevant trading partners, including the UK, Japan, and especially the EU.

The EU got away with a deal that left most political leaders unhappy: a 15% base tariff, plus 50% tariffs on steel and aluminum. Additionally, the EU (which did not impose symmetrically high tariffs in response), committed itself to investing EUR 600bn in the US and buying USD 750bn of energy products from the US. The deal was not great, even if EU Commission President Ursula von der Leyen said it was the best possible compromise, but it at least eliminated some of the existing uncertainty.

While the war in Ukraine continued unabated in spite of the many attempts by Trump to assuage Russian President Putin, and the war in Gaza sees no end in sight, while other geopolitical uncertainty remains elsewhere in the world, it is this climate of reduced policy uncertainty that dominated the mood at the Ambrosetti Forum.

During the meetings, the abysmal US labour market report came out, with the US adding only 22k people to the workforce – thus signaling a clear weakening in economic activity, caused by the immigration restrictions imposed by this administration. But even that was celebrated by the market with a fall in short- and long-term yields, as investors now expect the Fed to cut rates in September, and most likely at least once more this year. This may force the ECB to do the same in coming months, thus providing further support to risky assets.

Domestically, investors were relieved by the positive conclusion of the takeover of Mediobanca by Monte dei Paschi, which many see influenced (at least indirectly) by the government. Meloni’s government enjoys a very high approval rate among the Italian entrepreneurs, as it is maintaining stability and fiscal discipline, making Italy look better than France, which is currently in the eye of the storm, even in the absence of any concrete real reforms, and with still-sluggish growth potential.

For these reasons, the Ambrosetti forum was relatively uneventful this year, even if all participants were worried by the images coming from Beijing on the occasion of the September 3rd parade and the display of military might exhibited by the Chinese government.