Research

2025 Outlook

Five potential surprises for the economy and markets.

By: Collin Crownover Dirk Hofschire Jacob Weinstein
Updated: 12/6/2024
Key Takeaways
  • The two-year drop in U.S. inflation rates might not continue in 2025 due to persistent inflation pressures and the potential for new ones.
  • The fiscal debate in Washington might create volatility in bond and asset markets, as legislative proposals create anxiety about exacerbating an already challenging debt outlook.
  • Despite a Fed easing cycle, longer-term market interest rates may not fall as expected.
  • Emerging-market equities might give U.S. stocks a run for their money, as discounted relative valuations make the positive surprise hurdle easier to clear.
  • Investors might face below-average asset returns, as so much good news is already baked into consensus expectations.
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