Key Takeaways
- Credit is once again bid aggressively, ostensibly because of stronger-than-expected economic and earnings data as well as the belief among investors that policy uncertainty is lifting. We believe the latter may be premature, as there is limited data available regarding tariff-related impacts.
- U.S. exceptionalism has not gone away. Historically high margins, a well-developed culture of innovation, and access to the world’s most effective capital markets are attributes that set U.S. firms apart.
- Guardrails against the administration’s more aggressive policy initiatives—namely markets and Treasury Secretary Scott Bessent—have proven to be effective at reducing uncertainty.
The View: Our Macro Forecasts
U.S. GDP Growth 2025 Estimate—1.2%
We have bumped up our 2025 growth estimate by two ticks based on the rebounding wealth effect from the equity markets’ bounce back, along with consumers and businesses believing (rightly or wrongly) that…