Global Outlook & Strategy

Our title for this publication of our Global Outlook and Strategy is Changing of the Guard.

The title is a reflection on some of the significant changes that have occurred across economies, markets, and geopolitics in the second half of 2024. Many of these changes are likely to continue to reverberate into 2025. In focus for 2025 will be:

• US politics and the potential unpredictable nature of the Trump presidency’s rhetoric.
• Regime changes occurring in the Middle East following the Israel Hamas War, the fall of the Assad regime and a weakened Iran. Concerns arise in a world where the US is no longer the global policeman.
• China seems to have reached its limit on investment led growth, with an oversupply of housing and added pressure from tariffs on their exports from a range of countries.
• Equity markets have benefited from an upward re-rating in valuation multiples. The onus has now passed to achieving and exceeding the markets’ expectations for earnings growth.
• How will inflation travel in 2025? There are offsetting pressures from an upward drift in inflation as the US economy is strong and tariffs are imposed, and the dampening pressures from China exporting disinflation.
• Credit markets have fared well as substantial amounts of corporate credit have been refinanced. Will we start to see some more volatility as commercial real estate debt comes due in 2025?
• Will the US dollar start to peak out as the new US Administration focuses on an American first trade policy?
• At what yield will the enormous US government debt burden be financed or will the new administration be able to make inroads to cut spending?