'There's no free lunch.' Expect growth and inflation in 2025
After the Federal Reserve signaled it would be more hawkish in 2025, investors add monetary policy to the list of uncertainties that could affect the market in 2025. Brad Smith and Brian Sozzi sit down with Fed Watch Advisors founder and chief investment officer Ben Emons to discuss his expectations for the US economy in 2025 and how it impacts investors. As year-end approaches, Emons says investor sentiment is quite bullish to finish 2024. "We feel really good about the economy. We're good about the markets. Volatility is relatively contained, and as much as this Fed has made this transition now from [recalibrating] to a new phase, as Powell said, we seem to be pretty in control of what's going on." "Yet we're dealing with significant uncertainty ahead of us; we see a lot of new announcements coming through from the Trump administration, and although that's all pro-growth, there's also a lot of [likely] challenge there," he adds. The strategist says, "I do think it's a bullish outlook for the US economy. We could maybe even reach 5% GDP, but it will not go without the volatility," adding, "I do think we're going to get average higher volatility next year, simply because we do have a lot more policy uncertainty that we dealt with this year." Emons notes, "There's no free lunch," since economic growth will come alongside higher inflation. Watch the video above to learn more about Emons's market outlook, including why he expects the 2025 market to play like a casino. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Naomi Buchanan.
