Look Forward | Episode 21: 2025, A Year in Review

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Andy Critchlow: [00:00:00] Hello, my name's Andy Critchlow. I'm head of news at S&P Global Commodity Insights, and welcome to the Look Forward Podcast from S&P Global. In today's rapidly shifting Markets success depends on anticipating what's next. The professionals who excel are those who can spot emerging trends before they fully materialize.

Look Forward podcast delivers exactly that insights to help you prepare for tomorrow's opportunities and challenges. We bring you expert perspectives on macroeconomic trends, capital markets, energy transition, and global trade. A sharp focus on what these developments mean for the decisions that will shape your tomorrow.

This podcast connects you with S&P Global's. Look Forward council bringing cutting edge research on long-term trends and transformative [00:01:00] market shifts. Together we are committed to providing the forward-looking intelligence you need to navigate uncertainty with confidence. Welcome to the final edition of the Year of the Look Forward Podcast, our special Christmas edition, uh, to wrap up, uh, what has been, uh, an unforgettable 2025.

Um, my name's Andy Critchlow. I'm head of news at S&P Global Energy, uh, and I am delighted to be joined today by my co-hosts of the Look Forward Podcast. First, Molly Mintz. Um, who's joining me from New York? Um, Molly, do you want to say a little bit about you and what you do at S&P Global?

Molly Mintz: Sure, thrilled to be here visiting from New York, fresh off a 6:00 AM flight landed yesterday.

So you get me on about one operating brain cell today in the studio. Andy. My name is Molly Mince, lead strategist at S&P Global Ratings. [00:02:00] We cover emerging and established risks on our research and development team. So our ratings analysts obviously cover the core, um, all obviously across all sectors.

Our research and development team publishes a host of research across emerging markets, credit conditions, ratings, performance, private markets, sustainable finance, and um, I help to support our thought leadership and ratings, uh, research coverage across all those core areas.

Andy Critchlow: Wow. So you are really at the, uh, the sharp end.

Of the pointy stick.

Molly Mintz: Yes. Spearing away.

Andy Critchlow: Yes.

Molly Mintz: In these uncertain conditions, so to speak.

Andy Critchlow: Um, and we are also joined by, um, Aries Poon, um, a former colleague of mine at the Wall Street Journal, um, now with S&P Global in Hong Kong, Aries. Great to see you.

Aries Poon: Great to see you, Andy. Um, yeah, the world is, is, you know, round and, uh, I'm glad to, uh, get to work, uh, with you again.

So, uh, my name is Aries Poon. I'm based in Hong Kong. Uh, I'm leading the, uh, [00:03:00] analysis team for economics and country risk for Asia Pacific and Latin America. Uh, my team basically, um, uh. Provides economic forecast, uh, predictions, narratives, and also country risk. Um, assessment for more than 200 countries in the world.

Um, I joined S&P, um, eight years ago as the lead for, um, financial news and switched over to, um, the economics and country risk team around four years ago.

Andy Critchlow: You are a, um, a poacher turned gamekeeper. As, we would say in, in, in the UK you, you, you turn from being a journalist to being something that, you know, some would say infinitely more useful.

When we look back at some of our past podcasts this year, um, you know, probably one of the more, um, you know, interesting, um, in terms of kind of what he said actually coming to pass. Now, one of Paul's, you know, [00:04:00] main themes throughout the year when we interviewed him was the persistence of inflation and the impact that that can have on global economies because those inflationary fears, you know, certainly the Fed has been cautious on rates, uh, but those inflationary fears that we really did worry about back in say, 2022.

Russian invasion of Ukraine. You had a big kind of spike in commodity prices as a consequence of that. And you know, obviously a feed through into inflation rates globally, but that's sort of dissipated. I mean, where do you see inflation, you know, not just in the US going, but you know, globally, a. Over the next year?

Paul Gruenwald: Well, if you think back to 2022, that was a big surprise, right? We hadn't seen inflation, uh, at those rates since the 1970s. And to be honest, central banks had spent the previous two decades trying to get inflation up rather than get inflation down. And we had the combination of, some of the shocks, uh, supply shocks from the pandemic and overly [00:05:00] loose, uh, fiscal policy in many countries.

And we had that burst of inflation that has been, um, you know, that's been kind of put under control. We had the steep rise in policy rates, but most central banks or at are at or near their target that ECB in our view is done. For example, uh, cutting rates. But, um, that was a bit of, uh, an embarrassment for central banks and their credibility, uh, is very important to them.

They wanna make sure inflation expectations are anchored, uh, over the medium term. That's the way they measure their credibility. So I think the, the cuts have been cautious. We did see a 50 from the Fed, and I think we saw 50 from the Bank of Canada, but most central banks. Have been going by 25 basis points, cutting rates since the middle, uh, of last year.

And again, we're getting inflation close to target, although the tariffs are gonna complicate the picture a bit in the US.

Andy Critchlow: It's interesting, the tension that's caused by inflation globally. One of the earlier. Episodes that we recorded was with [00:06:00] Carlos Pasquale, chief, um, geopolitics Officer, uh, and thought leader at S&P Global Energy, Carlos, uh, former senior US Ambassador.

Someone uniquely positioned to look into some of the geopolitical impacts that the world has faced, and one of the things Carlos and I talked about was how no one in the world's happy at the moment.

Molly Mintz: Mm-hmm.

Andy Critchlow: You know, off air. We talked about, you know, this is an angry world and you know, I think that few people.

Certainly a few people that we've spoken to on this podcast can really comment on kind of what that means, you know, like you can, from your experiences, both in terms of international affairs and your career and, and now in your role at S&P Global.

Carlos Pascual: Um, Andy first, uh, thank you for having me on the podcast.

It's a pleasure to join you and thank you for having this conversation. I think this question of anger in the world of alienation of polarization is one that we really have to stare in the face and [00:07:00] deal with, um, in an a very explicit way. We faced it for a long period of time where there are groups of people within countries that have felt.

That they have not had the benefit of rising with economic growth. It's been an issue with globalization. It's been a question about how income is distributed and job opportunities are distributed internally within countries. It's an international issue on how the opportunities globally are spread across countries and it's an issue that's affected global institutions, the the UN, the World Trade organizations and others. It's effected

their credibility. And now Andy, I think we face another set of challenges where we have had, over the past eight decades, a global international order, fractured as it is with the anger that we've had that has been focused on the concept of rules of interdependence on, globalization to one now driven by the United [00:08:00] States, which is focused on being transactional, of doing deals, of being nationalistic. It's Make America great again. It's not looking at what is good for the world and it's protectionist, it's focused around tariffs. As President Trump has indicated, that's his favorite tool. And as a result of that, it puts us into an environment where that transactionalism and the individual negotiations create an environment of breaking apart relationships because Andy, I'm a lot more effective when I'm negotiating with you and breaking you apart from your team than really dealing with it together.

And it means that. Being anti alliance anti agreement is part of that transactional world. So we're now dealing with that added element on top of an angry world and the, the, the type of, um, fracturing and polarization that we've had in the past. So great challenges that we're facing [00:09:00] economically, politically, in the world of diplomacy.

Andy Critchlow: You Know. Yes, there's lots of positives. There's lots of, of, of great things that we can say around how AI is gonna boost economic growth. It's going to, um, um, I guess take much of the, the unpredictable nature out of economics and, and forecasting and research away. But also there's this great unknown about what, what it does do, right?

Molly Mintz: Brian on that front, let's unpack how data center investments are increasingly moving the macro needle. Our latest look forward journal research finds that AI driven data center growth added roughly half a percentage point to us GDP in mid 2025. What's behind this surge? Will these investments translate into lasting productivity gains rather than just a construction boom.

Brian Partridge: Yeah, I mean it's a lot to unpack, unpack there, but, but fundamentally, it's true. You know, data centers and the infrastructure that supports them are becoming a [00:10:00] critical engine for the US economy and beyond. The recent surge investment isn't just about LA or buildings, of course, and includes the servers, the racks, the cooling systems, the software and the R&D that power these facilities.

So our analysis at S&P suggests that these combined investments added a roughly a half percentage point, as you mentioned. And that's a clear sign that AI infrastructure is now a major economic contributor, not just a tech narrative or story. And this shift is transforming the tech sector itself.

When we think about the public cloud providers, we call them hyperscalers, um, in our world, Microsoft, Google, Oracle, AWS, they're now investing. With re revenue CapEx ratios comparable to like what the telecom operators will do during a major network build phase. So that's really creating a high tech capital and energy intensive set of facilities, which is really not what they've traditionally done in the [00:11:00] past, in, in, in a lot of corners.

So the result of this is big tech is becoming more CapEx heavy, more energy intensive, increasingly influential on productivity, um, uh, widely. The key question which you raise, right Molly, is where and how? And whe, when will this drive lasting productivity gains? So it's early. Our 451 research demand side data suggests that the expectations for scale remain high, but long-term impact here really depends on a number of factors, which is.

How effectively AI can augment labor, drive efficiency, and integrate into business processes. And these are complex challenges. They require a complete rethink of workflows and the human machine interplay and it, that's not easy. Um, but essentially where we are today is the infrastructure is being ground for these transformations.

And the [00:12:00] translation to sustain economic benefits will vary by industry, by company. By specific processes. Like for instance, in areas like software development and customer experience, the impact of AI is already pronounced and, and producing outcomes. Some industries are still trying to figure out what they're gonna do,

Andy Critchlow: But we've also, uh, looked at some of the old economy as well.

And one of the more interesting, uh, um, episodes that, uh, um, I hosted was looking into the growth of the cement industry. Hmm. I think that it's very easy to focus, uh, in today's world on. Tech on, on where, um, you know, the future growth is gonna come from. But actually so much of what we do in the world depends on, on old world skills, depends on builders.

It depends on putting up buildings around the world on, on, on powering growth through infrastructure. Something like 4.6 billion tons of, of cement that is global demand still. And, you know, we [00:13:00] need to have the investment to, um, you know, continue with these extractive industries, which are, you know, critically important.

But first Binny, I wanted to come to you with a question. Um, you know, why, why, why cement pricing? I mean, the Platts known for its oil, price, price benchmarks known for its, you know, LNG benchmarks. Cement is an new frontier. Um.

Binny Sabharwal: Yeah. Thank, thank you, Andy. Actually, a, a really good question. Something that we've been asked a lot in the last, uh, nearly one more than one year of, uh, us researching and launching coverage of the sector.

What we realized when that there we were, as you mentioned, we were covering gas, we were covering LNG, we were covering, we were covering all tertiary sectors that were related to cement, but for some reason cement, which is, you know, 4.1 billion tons or you know, consumed. And, uh, as Mr Akçay said, nearly 200 million [00:14:00] tons of sea bond trade, which is massive.

And it just went unnoticed. Uh, so, and when we started, uh, researching the sector as Mr. Structures also mentioned, you know, the geopolitical developments, the developments and the trade orders, everything pointed to the fact that, you know, this sector needed to be looked at. And we launched with, uh, in a very lean manner, uh, in January this year with actually.

Prices outta Turkey because as Mr Akçay mentioned, and our research also proved that, uh, Turkey is a dominant force when it comes to global cement trade,

Andy Critchlow: you know, for 2026, you know, what do you think is the kind of key, um. You know, for, for me, if I think, you know, cement was the kind of interesting story in, in 2025.

Right. Um, what's the interesting story in 2026,

Molly Mintz: I would be remiss to say cement. Um, I'll leave that to you for, um, from my perspective in [00:15:00] what we're really closely watching in S&P Global Ratings is private markets. I think the, um, the boom. Of data centers is one thing, but how private markets have grown in scale, scope sophistication over the last decade has been extraordinary to watch.

And you know, private credit can no longer be seen as a niche market. It really is. Um, not only competing with public markets, but totally converging with, um, public credit. And we like to say in, um, at ratings that credit is credit, whether public or private, um, rated or unrated. Um, and we're really closely watching to see how new and novel structures are emerging.

What we're seeing in data centers is that new structures are emerging over time, new financing structures, and it's really bringing, um, a, a tremendous level of, uh, complexity to the market. Mm-hmm. Um, it's taking a new level of, um. Analytical excellence and criteria from [00:16:00] our analysts to, um, rate these, uh, structures.

I think it'll be really interesting to see moving forward, um, how private credit adapts, especially now that public sentiment has. Started to shift with some, um, really high profile, high profile defaults towards the end of this year. Um, we saw first brands make some big news in the market, um, with their default.

Um, there's been some market commentators question whether private credit is a story of cockroaches versus termites. Um, I may be from Colorado, but I am not a very big fan of bugs. The way that we see pipe private credit moving forward is that, um. Systemic, we do not see systemic risk in the market.

Mm-hmm. We see private credit, um, and these examples of defaults to be idiosyncratic, um, and not indicative of broad systemic risk. Mm-hmm. But that we see that private credit over time may emerge to be, um, creating some more fragmentation in the [00:17:00] market. Because as these novel structures kind of come into play, there is the possibility, um, and likelihood that with more customization, more bespoke structuring, um, you're kind of getting one-on-one approaches.

There's less room for, um, uh, you know, tradability in the market. You're, you're getting, you're not getting a one size fits all approach that you see in general public markets. So that's something that we're gonna be closely paying attention to.

Andy Critchlow: Just to wrap up. Um, Aries, um, we've got Molly's big thing for 2026.

Mm-hmm. Private credit growth of, of private credit markets and growth of scrutiny and interesting private credit markets. What's your big thing for 2026 that you think people should be keeping their eyes on?

Aries Poon: Um, I think, um, technology, but technology as in, um, uh, uh, technology, uh, competition, [00:18:00] you know, among countries, uh, which are going to shape, uh, some of the major bilateral or multilateral relations, you know, involving us, China, EU, Asian, and other countries.

Um, I, I think the other thing I. Am also interested to look at is the development of Stablecoin. 'cause in fact, you know, many clients actually brought up this question recently. You know, given the market cap of stablecoin has been, has reached to almost $300 billion, you know, and it's actually a big thing.

And

Andy Critchlow: How does it work? Stablecoin? Explain it to me. I'm, I'm never quite sure how these, these digital coins,

Aries Poon: so these. So, so, so these are crypto asset, um, issued by, um, financial intermediaries, or, uh, they're not issued by Central Bank. That would be CBDC. Right? But this one is issued by financial intermediaries and, um, and they, they, they do not have geographical restrictions.

So, uh, you know. Once you have the e-wallet, uh, say [00:19:00] JP Morgan, Goldman Sachs, they issue certain amount of, um, you know, stable coins backed by reserves based in US dollar, or us, uh, treasury, short term treasuries. They can issue that to anyone and uh, those could be usually used. As in, um, cross-border payments and also for, uh, some countries, uh, for store of value because, um, I, uh, you know, in, in some countries where the exchange rates, uh, tends to be weak or volatile, um, then, you know, you know, savings in, uh, stable coin could be one way to hedge against.

The, um, the, the value of assets that are, you know, um, uh, denominated in non-US dollar, um, asset. So we are going to see, there will likely be quite fast adoption of stablecoin, of course, within the us you know, for faster payments and stuff. But also outside of the US, especially in emerging and frontier markets that are relying on the step stability of [00:20:00] the, um, of the US dollar.

So, um, I think in the long term, it also plays into the narrative of, um, the dominance of US dollar in the global market as, as in reserve, um, uh, currency. Um, so I think, uh, in, in, uh, rather than de dollarization, you know, that has been, someone talked about it. Um, I think it is more like, um, like a re dollarization, uh, uh, move, uh, with the wide adoption of stablecoin.

So I think that would be, that would have. Quite implications also on, um, you know, the geopolitical implications of the dominance of different currencies. Um, especially with Chinese Yuan, which is, um, rising as, um, another alternative, uh, you know, among BRICCS and among other countries when they trade, um, uh, among themselves.

Andy Critchlow: Finally, I understand cryptocurrency and stablecoin. Thank you. Um, well, um, for me it's agriculture and I think the [00:21:00] big. Story of 2026, aside from potential, you know, peace deal in Ukraine between Russia, peace in the Middle East, um, global prosperity, and you know, Elon Musk finally sending people to to Mars.

I think it's gonna be, um, agriculture. Um, I think that it takes at least a year for farmers, um, ultimately who are the, the engine drivers of the global agricultural powerhouse, which feeds the world. Um, it takes them a year to adjust to any, big policy changes, and we had those big policy changes at the beginning of this year with the Introduc introduction of tariffs.

We've already started to see, you know, big changes in trade flows as a consequence of that, whether it's, uh, uh, China not buying us, uh, soybeans instead going to Brazil. Um, just one example, um, and you know, playing into this as well, is the impact of climate change [00:22:00] globally. Um, uh, uh, uh, global heating. Uh, increase in, uh, severe climatic events.

This all has a big impact on agriculture, but it takes farmers who, as I said at the, at the grassroots, the people that power the industry, it takes 'em about a year to kind of figure out, well, this is what I need to do strategically with my business. Uh, this is what I need to plant. This is what I need to grow.

Uh, these are the animals that I need to, to, to rear. And if you think about it. A farmer can only do really three things with the capital that a farmer has, they can buy more tractors and machinery so they can plant more crops, raise more animals, they can buy more animals, or they can buy more seed and plant more crops, or they can buy more fertilizer.

So there's three things that you can actually do to increase productivity and all of those three things, it basically takes a year to put those into, uh, into effect and to see a change. So I think that we had the trigger in 2025 for global [00:23:00] agriculture, which was the imposition of tariffs. Farmers now have had a year to adjust, react, reposition themselves, and I think 2026, we'll see, um, um, you know, a different world for agricultural commodities, whether that's gonna lead to more inflation.

Um, I don't know. Whether it could lead to less inflation, I dunno. But it's gonna be an interesting sector to look at. And ultimately it feeds into the narrative, which is something that has underpinned my career for the last 25 years, which is one of growing consumption. We live in a world of about 8 billion people going to 10 billion by 2025, and all of those people are gonna need more energy, more commodities, more resources, more cement.

More stable coin, uh, more private, uh, uh, uh, finance and capital. Um, uh, and you know, that's why working at S&P Global and, uh, uh, getting access to some of the great minds that we [00:24:00] have, like Molly Mintz, uh, and, uh, uh, Aries Poon, uh, uh, the great research that we, uh, produce. The news and insights that we publish on a daily basis, uh, is a great privilege.

So, um, thank you both and a merry Christmas, wherever you are and a happy New Year. Thank you.

Molly Mintz: Thank you,

Aries Poon: thank you. Happy holidays.