If one word defines 2025, it’s uncertainty, driven in part by President Trump’s disruptive, “flood-the-zone” governing style. Economic uncertainty is at its highest level since 1900, although we anticipate it to ease in 2026.
Despite concerns about the labor market, growth may broaden or even accelerate, supported by fiscal and monetary stimulus, consumer spending from the One Big Beautiful Bill Act, and ongoing investments in AI. However, sticky inflation likely means fewer rate cuts than the market may expect. Key risks persist, including market volatility, rising unemployment, and geopolitical tensions.