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2025 Midyear Market Outlook
Investing in a post-globalization world
Trade policy upheaval has put deglobalization and market shifts into overdrive. Our investment experts delve into understanding theemerging risks—and opportunities—for investors in the second half of 2025.
2025 Mid-Year Market Outlook Summary
Ritu Vohora, CFA® Investment Specialist, Global Capital Markets
Investing in a post-globalization world requires investors to re-think asset allocation, as favored assets become less attractive, and new opportunities emerge. Investment Specialist Ritu Vohora Provides a Summary of Our 2025 Midyear Market Outlook and how it helps you navigate the second half of 2025
Economy
Trump’s tariffs will hit the U.S. economy hardest in the near term
Trump’s tariffs will hit the U.S. economy hardest in the near term
The U.S. economy will be hit hardest by Trump’s tariffs in the near term amid rising costs for businesses and a reduction in consumer purchasing power.
Equity
Equity Markets to Broaden Further
Jennifer O’Hara Martin Portfolio Specialist, Global Equity, The broadening of equity markets - accelerated by the new administration’s policies on trade and national security - is significantly influencing capital flows. These changes are prompting investors to seek global diversification and favor active management strategies. As a result, this evolving landscape presents expanded opportunities across all markets.
Want to read the full Midyear Market Outlook?
Fixed Income
Bonds with credit risk may outperform government debt
Bonds with credit risk may outperform government debt
Paul Massaro, CFA®Head of Global High Yield, Chief Investment Officer, highlights two of the major drivers of global bond markets this year have been the United States tariff actions and the significant German fiscal expansion. These factors signal a weaker outlook for developed market sovereign bonds, but the environment could offer opportunity in credit and select emerging market bonds.
Asset Allocation
Inflation protection and equity diversification to drive asset allocation
Inflation protection and equity diversification to drive asset allocation
Sébastien Page CFA®Head of Global Multi-Asset, Chief Investment Officer, discusses the risk of surprises on inflation and how attractive valuations may lead us to favor international and value equities when determining portfolio allocations.
Revisiting our expectations for 2025
We were right that tariffs would be disruptive and that equity markets would broaden in 2025, but we underestimated the impact of the former on U.S. assets. We looked back at some of the predictions we made in our 2025 Global Market Outlook last November and scored ourselves for accuracy based on where we are today, almost halfway through the year. It turns out that while we correctly anticipated that tariffs would disrupt markets this year, we did not foresee the impact this would have on U.S. assets. And although we were right to predict that equity markets would expand, small cap stocks have performed less well than we expected.
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