The global economy is poised for a "robust" expansion over the near term, but a faster-than-expected rise in U.S. inflation could be "disruptive" for growth, Fitch Ratings said in its latest Global Economic Outlook report.
Global growth is projected at 3.3% in 2018 and 3.2% in 2019, unchanged from Fitch's forecast in March.
Accelerating private investment, tightening labor markets, pro-cyclical U.S. fiscal easing and accommodative monetary policy support above-trend growth in advanced economies, the report said.
Growth forecasts for this year in the U.S. and China were revised upward, offsetting the downward revisions in the eurozone, the U.K. and Japan.
However, a faster pickup in inflation and the Fed's likely aggressive response to it remain a key risk on outlook.
"An inflation shock could bring forward adjustments in the U.S. and global bond yields and sharply increase volatility, harming risk appetite," said Brian Coulton, Fitch's chief economist.
Fitch projects four Fed rate hikes in 2018, followed by three more in 2019.
The rating agency said recent trade tensions are not expected to materially affect its global growth outlook at this stage, but geopolitical concerns in Italy and the rest of the eurozone could weigh on investment prospects.
"A major escalation that entailed blanket across-the-board geographical tariffs on all trade flows between several major countries would be much more damaging," Coulton said.