Economic and Market Outlook for 2025: Beyond The Landing
Overview
The good fortune of high productivity growth and a surge in available labor has propelled the U.S. economy, while other economies have been less lucky. A key risk to the U.S. outlook is the potential waning of the positive supply-side factors, though expansionary fiscal policy may cushion any negative impact on growth as the era of sound money lives on. That said, markets face a growing point of tension: Assets with the strongest fundamentals have the most stretched valuations, and vice versa. Short-term economic and policy risks will help determine whether momentum or valuations dominate investment returns in 2025.