• 2025-1-2 Matters of Democracy: Economics and politics collide

  • Jan 2 2025
  • Length: 15 mins
  • Podcast

2025-1-2 Matters of Democracy: Economics and politics collide

  • Summary

  • Inflation as the Central Theme:

    Inflation dominated the economic and political landscape in 2024, influencing market participants' decisions.

    Monetary Policy & The Federal Reserve:

    The Fed started lowering interest rates in September 2024, signaling a response to both inflation and a softening labor market.

    Labor Market Softening:

    The US unemployment rate has risen from 3.7% to 4.2% by November 2024, suggesting a weakening labor market.

    Political & Fiscal Policy:

    The 2024 elections saw inflation as a top voter concern.

    A new administration taking office could bring changes to trade, immigration, and tax policies, potentially impacting inflation and the economy.

    Market Volatility and Resilience:

    The 10-year Treasury yield experienced significant volatility due to uncertainty around monetary policy and fiscal concerns.

    2025 Outlook: A Mixed Picture

    Economists anticipate moderate economic growth of 2.1% in 2025, a slowdown from 2024’s estimated 2.7%.

    Potential headwinds in 2025 include geopolitical risks and overseas economic issues.

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