Key Takeaways
- Credit’s relative value across all but the riskiest of its ever-growing array of options remains strong, with meaningful income and diversification attributes in demand in a world of stretched risk asset valuations.
- Policy uncertainty has diminished but not gone away. Better definition of the full impact of tariffs and how that will impact the Federal Reserve’s reaction function will be important drivers of valuation over the next six months.
- The U.S. consumer (and its all-important spending) is benefiting from firm labor markets, wage gains running ahead of inflation, and positive wealth effects.
The View: Our Macro Forecasts
U.S. GDP Growth 2025 Estimate—1.6%; 2026 Estimate—1.6%
We have bumped up our 2025 growth estimate as a result of stronger consumer spending and surging technological investment by businesses, as well as lower-than-expected tariff impacts due to negotiated delays and adjustments. Consumer spending has remained buoyant,…