Fed Near Neutral Signals Caution Ahead, Shifting Focus to Fixed Income in 2026 
China's April 2025 PMI report reflects a mixed economic picture. The Manufacturing PMI surprisingly fell to 49.0, below the expansionary threshold for the first time in three months, largely because of a steep drop in export orders caused by the persistent trade tensions with the U.S. Domestic sales, however, were steady, buoyed by consumer goods and high-tech manufacturing industries, whose PMI stood at 51.5. Production expectations were also optimistic at 52.1, reflecting some level of optimism in spite of the overall decline.
The Non-Manufacturing PMI dipped to 50.4, its weakest growth since late 2024. It was a deceleration that was fueled by a more rapid decline in new orders (44.9) and a sharp fall in foreign orders (42.2), both of which were a result of the tariffs. Highlights in the non-manufacturing sector were some robust tourism and leisure industries, as well as ongoing business in information services.
Overall, the Composite PMI decreased to 50.2, just above a contraction, marking rising pressure from trade restrictions and an unevenly recovering domestic demand. The indicators indicate that though some sectors continue to grow, the overall economic climate is beset by difficulties that may hold back further expansion.
