What are you watching going into the New Year?

Freedman: We’re keeping an eye on several things, including growth, inflation, and the incoming administration’s policy agenda regarding taxes, trade, regulation and immigration. All of these issues have implications for the bond market, which we think will set the tone for the investment landscape in 2025.

Bovino: We think the Fed will cut interest rates just two times in 2025. The reason for that is due to continued economic strength, which is keeping inflation sticky, and the fact that the new administration’ s proposals for tariffs and tax cuts, in a full-employment economy, are both potentially inflationary. The Fed raises rates to reduce inflation by making borrowing more expensive, which cools demand; it lowers rates to boost a flagging economy and job market. The Fed is still not where it wants to be – at around 2% inflation. Right now we’re at about 2.7%.

Prices for everything have been high for so long. Will they finally come down in 2025?

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SOURCE US Bank