2025 forecasts by the Street
New year trends, geopolitical shifts and market scenarios, from inflation to AI
2025 could be an eventful year with the interest rates coming down but inflation persisting. There is a wide range of possible outcomes, with even a chance of Fed rising rates! Thus, it is important to keep the mind open and take into account more than one view.
Here we report summaries of some 2025 forecasts by relevant analysts.
Global 2025 Year-Ahead Outlook from J.P. Morgan Research
The 2025 economic outlook from J.P. Morgan projects a dynamic global landscape characterized by moderated growth and continued economic divergence. Global GDP growth is forecasted to slow to 2.2% in 2025, down from 2.7% in 2024, with the U.S. serving as the primary driver of resilience. Despite headwinds such as restrictive monetary policies and external trade shocks, the U.S. economy benefits from a robust labour market, strong household balance sheets, and a significant expansion in AI-related capital investment, maintaining its role as the global economic engine. Meanwhile, Europe and Emerging Markets face greater challenges, including structural inefficiencies, weaker growth momentum, and adverse impacts from geopolitical uncertainties.
Inflation is anticipated to decline globally, with CPI easing to 2.7% by year-end 2025 from 3.0% in 2024. However, the disinflation process is uneven across regions due to differing supply-demand balances and policy responses. Advanced economies like the U.S. and Eurozone are expected to achieve inflation closer to central bank targets, while Emerging Markets may struggle with persistent inflationary pressures exacerbated by weak currency dynamics and external shocks, such as escalating U.S.-China trade tensions.
Monetary policies are transitioning toward easing cycles after an aggressive tightening phase in recent years. Central banks, including the U.S. Federal Reserve and the European Central Bank (ECB), are likely to cut rates, though the pace and magnitude will vary. The Fed is projected to reduce rates by 100 basis points to 3.75%, while the ECB may lower rates below neutral levels to counter cyclical weakness. In contrast, policy normalization in Emerging Markets remains constrained by currency vulnerabilities and inflation risks, necessitating cautious adjustments.
Key geopolitical developments, particularly in the U.S., are reshaping the global macroeconomic outlook. The election of a new administration with a policy agenda focused on deregulation, fiscal stimulus, and trade protectionism is expected to amplify U.S. exceptionalism. Measures such as increased tariffs on Chinese imports, anticipated to rise to 60%, will likely pressure global trade flows and dampen sentiment in regions like Asia, which are highly exposed to Chinese growth dynamics. For China, these pressures are compounded by structural challenges, including ongoing property sector weakness and constrained fiscal capacity, which are expected to limit its growth to 3.9% in 2025.
Market implications include heightened dispersion across asset classes, sectors, and regions, creating opportunities for active management. U.S. equities are well-positioned to outperform, driven by deregulation and broadening earnings growth, while Europe and Emerging Markets may face continued underperformance. In commodities, the outlook is bearish for oil due to weak supply-demand fundamentals and bearish for base metals due to slowing Chinese demand, while gold remains a favoured asset for its resilience across scenarios. Currency markets are expected to reflect U.S. strength, with the dollar maintaining its dominance against the euro and other major currencies.
The Wells Fargo 2025 outlook emphasizes a U.S.-led global economic recovery, driven by a "soft landing" scenario where growth acceleration balances sectoral disparities. The U.S. economy is expected to lead global growth due to fiscal stimulus, industrial reshoring, and robust consumer spending. Key sectors such as manufacturing and technology are poised to benefit, while moderate inflation pressures may persist due to higher tariffs, wage increases, and supply-demand adjustments.
Investment strategies centre on equity markets, with U.S. large-cap equities preferred over international counterparts due to structural and monetary advantages. Commodities are expected to thrive amid tight supply conditions and a modest global demand rebound, while fixed income strategies favour intermediate-term U.S. bonds in a declining interest rate environment.
Wells Fargo highlights emerging investment opportunities, such as AI-related technologies and industrial power infrastructure, projected to reshape capital spending and productivity growth. Geopolitical risks remain a concern, but historical market resilience supports continued diversification and selective positioning across cyclical and growth sectors. Private equity and alternative investments are identified as attractive areas, especially in high-growth segments and infrastructure projects. Overall, Wells Fargo anticipates a constructive environment for investors, bolstered by U.S. economic leadership and transformative technological trends.
ING's 2025 global economic outlook paints a picture of uneven recovery amid persistent geopolitical and structural challenges. Global growth is projected to slow, driven by stagnation in Europe and moderated momentum in the U.S. and China. In the U.S., fiscal stimulus, tax reforms, and reshoring are anticipated to spur moderate growth, although inflationary pressures may linger due to tariffs and supply-side constraints. The Federal Reserve is expected to adopt a measured approach to rate cuts, aiming for economic balance amidst tariff-induced inflation risks.
Europe faces more pronounced difficulties, with political instability in major economies like France and Germany dampening growth prospects. Structural issues in the eurozone, such as waning competitiveness and fiscal constraints, compound these challenges. The European Central Bank is forecasted to lower rates below neutral to support growth, but fiscal convergence among member states remains elusive.
In Asia, China’s growth is expected to stabilize at around 4.6%, supported by fiscal and monetary stimulus, but it faces external headwinds from U.S. trade policies and internal challenges in the property market. India, on the other hand, is poised to lead regional growth, driven by private investment and consumption, although at a slightly reduced pace compared to 2024. Other emerging Asian economies may benefit from rate cuts, but currency volatility and external shocks could pose risks.
Commodity markets are expected to remain under pressure, with oil prices constrained by supply-demand imbalances and gold providing stability amid uncertainty. The dollar is anticipated to strengthen further, benefiting from geopolitical tensions and interest rate differentials, though a potential shift in U.S. policy could temper this trend.
ING identifies three key themes for 2025: a divergence in global investment patterns, a re-emergence of inflationary cycles requiring adaptive monetary policy, and potential yield curve control to address rising debt costs. Despite the challenges, selective investment opportunities exist, particularly in green energy, AI, and regional infrastructure projects, with global trade dynamics continuing to evolve under new geopolitical realities.
Saxo’s Outrageous Predictions 2025
Saxo’s Outrageous Predictions are not exactly news and not exactly real – at least not yet. And while we don’t know which stories will drive the global economy in the coming year, our 2025 predictions, from Nvidia trouncing its Mag 7 peers to the fall of OPEC, from a bold bet on reflation in China to a great leap forward in biotech, are just as promised. Outrageous.
Trump 2.0 blows up the US dollar
As the new Trump administration turns the global financial system on its head with huge tariffs, the world scrambles to find alternatives to the dollar.
Nvidia balloons to twice the value of Apple
Armed with its revolutionary AI chips, could tech giant Nvidia grow to twice Apple's size and become the most profitable company of all time?
China unleashes CNY 50 trillion stimulus to reflate its economy
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune of trillions of CNY is the only answer.
First bio-printed human heart ushers in new era of longevity
It’s alive! Fusing bioengineering and medical science, scientists successfully bio-print a human heart, promising to extend the lives of millions.
Electrification boom ends OPEC
As electric vehicles become more affordable, could oil-rich OPEC become irrelevant in 2025 and find itself on the ash heap of history?
US imposes AI data centre tax as power prices run wild
With tech giants sucking up power supplies for their new AI data centres, utility bills skyrocket and an outraged public demands action.
A natural disaster bankrupts a large insurance company for the first time
After a year of wild weather in 2024, a catastrophic storm hits the US in 2025, sinking a large insurer that has underestimated climate change risks.
Sterling erases post-Brexit discount versus the euro
As Europe’s economy struggles, fresh fiscal policy winds are blowing in the UK, driving sterling back to levels versus the euro not seen since before Brexit.
BCA outlook provides a retrospective on economic and financial developments from 2025, blending analysis with a predictive, multiverse-inspired framework. It reflects on significant market movements and macroeconomic dynamics while revisiting investment strategies that would have been effective during the period.
They identify 2025 as a tumultuous year marked by a U.S. recession beginning in May, driven by a trade war, turmoil in the bond market, and weakened consumer spending. The labour market showed strain, with job openings declining, unemployment rising, and permanent job losses increasing. Pandemic-era savings depletion compounded financial stress on households, while higher interest rates hindered consumption and borrowing.
The housing sector experienced pronounced challenges, with affordability issues, declining construction activity, and muted lending growth. Meanwhile, commercial real estate faced rising vacancy rates, loan delinquencies, and regional bank vulnerabilities due to their exposure to these markets.
The international scene saw intensifying trade tensions, particularly between the U.S. and China. A trade war, coupled with policy uncertainty, curtailed business investment globally. Concurrently, major economies, including Canada and the eurozone, slid into recession, while China’s economy stagnated under housing market woes and insufficient consumer-focused stimulus.
In financial markets, equities endured a sharp downturn, with the S&P 500 experiencing a peak-to-trough drop of 31%. Defensive sectors like consumer staples and utilities outperformed, while riskier or cyclical areas suffered. The bond market saw rising yields and a subsequent Fed intervention, while currency markets highlighted yen strength amid global economic disarray. Commodities reflected mixed outcomes: oil and industrial metals declined, while gold gained amid crisis-driven demand.
BCA critiques overly optimistic investment expectations at the start of 2025 and emphasizes the value of defensive portfolio strategies. It also underscores the importance of adapting to macroeconomic shifts, advocating for a focus on high-quality equities, select defensive sectors, and safe-haven assets like gold.
The Apollo Academy’s 2025 Economic Outlook emphasizes the continued strength and resilience of the U.S. economy, supported by unique structural advantages and fiscal policies. The asset manager projects above-average GDP growth, moderated inflation, and stable employment, with no imminent signs of a recession despite higher interest rates. Key drivers of U.S. economic performance include reduced sensitivity to Federal Reserve rate hikes due to widespread fixed-rate debt, robust corporate spending driven by the AI boom, and government investment through landmark legislation like the CHIPS Act, Inflation Reduction Act, and Infrastructure Investment and Jobs Act.
Inflation, while significantly reduced from its 2022 peak, remains slightly above the Fed’s 2% target and is expected to hover around 2.4% in 2025. Consumer spending remains robust, fueled by strong household balance sheets, low debt-service ratios, and increased cash flows from rising fixed-income yields. Corporate investment, particularly in AI and technology, continues to bolster economic growth, with bankruptcy and default rates declining.
Apollo highlights potential risks, including geopolitical tensions, escalating U.S. debt, and the fiscal implications of President-elect Trump’s proposed policies, such as higher tariffs and tax cuts. These measures could elevate inflation and strain fiscal sustainability, particularly as interest payments on federal debt have surpassed defense spending.
For monetary policy, Apollo predicts slower-than-expected rate cuts by the Federal Reserve, with the federal funds rate projected to settle around 4.0% by the end of 2025. However, fiscal pressures and geopolitical uncertainties may complicate the Fed’s ability to navigate inflation control.
In summary, the U.S. economy appears resilient and poised for continued growth in 2025, driven by unique fiscal and technological tailwinds, though long-term risks tied to geopolitical conflicts and fiscal imbalances remain prominent concerns.
The 2025 Global Outlook from BlackRock’s Investment Institute explores a transformed economic and investment landscape defined by what it calls “mega forces.” These structural shifts—such as the rise of AI, geopolitical fragmentation, and the energy transition—mark a departure from traditional business cycles and demand new approaches to investing. They underscore that long-term economic trends are being reshaped, requiring significant capital to finance transformative infrastructure, including AI-related developments and low-carbon energy systems.
The analysis begins by emphasizing that traditional economic cycles are less relevant. Factors like the broad adoption of AI and post-pandemic normalization have driven both growth and moderated inflation without typical recessionary conditions. As these structural forces reshape economies, BlackRock calls for rethinking investment strategies. For instance, traditional 60/40 portfolio frameworks are becoming obsolete. Instead, thematic investing, focusing on trends like AI and infrastructure, as well as leveraging private markets, is recommended to capitalize on emerging opportunities.
Geopolitical tensions and economic fragmentation also play central roles in BlackRock's outlook. These dynamics are restructuring supply chains, trade flows, and even reserve currency usage. The competition between the U.S. and China over AI and technological dominance underscores a broader fragmentation into economic blocs, with emerging markets like India and resource-rich nations benefiting strategically.
In the investment realm, BlackRock remains optimistic about U.S. equities, particularly those linked to the AI boom, despite high valuations. Japanese equities also receive a positive outlook due to corporate reforms and mild inflation, while European stocks are approached cautiously given political uncertainty. Long-term U.S. Treasury bonds, however, are viewed sceptically due to fiscal pressures and rising yields, while private markets—especially in infrastructure equity—are emphasized as critical avenues for addressing financing needs and capturing growth.
BlackRock also discusses diversification in light of rising volatility. With government bonds no longer reliably offsetting equity risk, assets like gold and even bitcoin are noted as potential new hedges. BlackRock’s stance is clear: the current environment demands a dynamic, granular approach to portfolio management, emphasizing active strategies and thematic investments to navigate and profit from the ongoing transformation of global markets.