Global Market Perspectives Diverging Fortunes

2025-01-10 10:40:00 ET

Summary

• A complex global picture is emerging, with significant divergence in growth and policy actions.
• The U.S. economy remains resilient, but with pockets of weakness requiring careful watch.
• The Federal Reserve will likely adopt a slower, more cautious approach to policy.
• Equity market gains may be challenged by elevated bond yields and expensive valuations.
• Fixed income credit spreads to remain range bound, with a bias upwards.

By Seema Shah, Chief Global Strategist | Brian Skocypec, CIMA, Director, Global Insights & Content Strategy | Christian Floro, CFA, CMT, Market Strategist | Jordan Rosner, Sr. Insights Strategist | Ben Brandsgard, Insights Strategist

Key themes for 1Q 2025

• A complex global picture is emerging, with significant divergence in growth and policy actions. While the U.S. continues to thrive, China and Europe are struggling. Proposed U.S. import tariffs threaten to intensify these diverging fortunes, reinforcing the U.S. exceptionalism theme. Policymakers will need to respond accordingly.

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