Wall Street predictions for the year ahead are usually defined by expectations for growth, inflation and other dull-but-worthy economic indicators. For 2025, those are all overshadowed by a person — and he is anything but dull.
The return of Donald J. Trump to the White House dominates this year’s crop of investment outlooks published by the world’s major banks, advisers and asset managers. Overall, his anticipated pro-business policies are fueling a sense of optimism, particularly when it comes to Corporate America and US assets. Yet his tough talk on global trade is also creating nervousness, while his general unpredictability has many prognosticators on edge.
To welcome 2025, Bloomberg News has collated over 700 key calls from more than 50 leading financial institutions, presenting them here for easy analysis and comparison. In them, readers will find an unusual degree of consensus across a range of topics.
The US economy and assets are once again expected to power ahead, enjoying new momentum from Trump and benefitting from the comparative lack of appeal of other major markets, many of which could be hit by his tariffs. This will be a world, says JPMorgan Chase & Co., “where US exceptionalism gets reinforced.”
Inflation is seen as broadly contained, albeit unlikely to fall to target as Trump throws up trade barriers and takes a hard line on immigration. “It will take longer than expected for the Fed to travel the last mile toward its inflation goal,” Apollo Global Management says. It’s one of multiple firms that think interest rates will be cut more slowly than currently priced by the market.
Pretty much every institution warns investors not to expect another year of equity returns topping 20%, just like they did a year ago. But few are ready to call an end to the artificial intelligence-fueled stock boom. BNY Mellon Wealth Management believes “AI’s role in the world will surpass that of other technologies that propelled earlier periods of tidal change.” While no one else quite matches that bullishness, many expect gains to broaden as adoption of the tech spreads.
And it may not be a “year of the bond,” given current tight pricing and ongoing worries about excessive government borrowing. But starting yields across both rates and credit are solid, and many firms would agree with the sentiment captured by Schroders: “The old-fashioned reason for owning bonds — to generate income — is back.”
Meanwhile, with lower returns expected from key assets like stocks and so much uncertainty surrounding Trump and US policy, diversification is the name of the game, Wall Street reckons. Look to alternative assets like private markets and hedge funds, firms say. And of course, many urge you to rely on your trusty professional money manager to help navigate this complex landscape.
From Trump 2.0 to wildly expensive US assets to the lurking threat of bond vigilantes, this is what the finance world’s best and brightest see in the year ahead.
By: Sam Potter for BloombergMkt
