U.S. stock markets experienced positive performance in 2024, and that trend is expected to continue in 2025. However, 2025 also has the potential to experience increased market volatility and shifting trends due to policy changes from the incoming administration combined with uncertainty about inflation and global economic conditions.

Given the substantial price action in rate markets, we consider what outcomes the market is currently pricing, the risks to this “consensus” view, and what we think will or will not occur as the new administration begins its term.

Understanding the interplay of policy, market sentiment, and regional dynamics is critical for successful investment positioning in this era of renewed protectionism and global economic realignment.

This is the second of a three-part series on the two issues that led to 2024’s anti-incumbent party backlash. This paper evaluates salient macroeconomic, demographic, and social factors that have or should inform immigration policy, as well as the policy solutions put forward by the incoming administration to address unauthorized workers in America.

As risk-on traders take a victory lap amid surging equity markets and now renewed monetary policy accommodation, the expectations for a soft landing in the U.S. economy now form the base case scenario for a preponderance of U.S. investors.