Economic Pulse: October 2025

The Big Picture: Closing the third quarter of 2025, it seems we're caught between resilience and restraint. Growth is holding steady, driven by a seemingly never ending appetite for more tech and (overheated? 🤫) AI investments. But even with this hyper-growth industry pushing into new highs, we are still headed towards an uninspiring expected global economy growth projection of just 3.0% this year. (IMF Link, World Bank Link)

Persistent Inflation Pressure: While global inflation is moderating, it’s doing so unevenly. The U.S. has seen inflation tick back up to 2.9% in August, Europe is managing to keep inflation near target, while China is taking measures against deflation in the monetary system.

Trade Wars and Supply Chains: Pressure on the promise of globalisation continues grow and supply chain disruptions have become a normal headline to read in your morning paper. Companies are constantly scrambling to diversify sourcing and build resilience into their operations. The most recent US government interventions in free trade and production permits has added to the complexity of stabilising output.

The Bottom Line: Going into October 2025, we find ourselves in a state of “managed uncertainty”. The huge impact of partisan politics and divisive policy making in some of the largest economies seems to have made geopolitical activity the main force that is shaping the financial markets, rather than purely economic forces.

What does it mean?

For the World? China’s upcoming policy meetings later this month, OPEC+ production decisions, and central bank communications will likely set the tone for the final quarter of 2025. For investors, diversification across regions, sectors, and strategies will remain key.

For us? The three sub-portfolios of the Shuhari.Capital Engine are set to a broad diversification even using the default settings. So I'm generally certain we are capturing a broad enough range of industries, assets and geographies. The key differentiator to buying the broad market will be the month-on-month weight adjustments within the Momentum Chaser and the Sector Navigator with its Alpha Overlay.

Truthfully, there is no past experience (yet) to fall back on for expectations on how the engine will perform and if the rebalancing weights can manage to bolster some of the volatility. I will write a dedicated post to evaluate the settings we have currently implemented and run stress tests to see how performance could be impacted.