SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo Investment Institute (WFII) today released its “2025 Outlook: Charting the Economy’s Next Chapter.” WFII’s global economic outlook is that the U.S. economy’s continued expansion will lead the world economy. As well, the U.S. stock market rally will broaden, with earnings being the primary driver of prices across equity asset classes.
WFII expects equity market leadership breadth to continue to widen, including extended participation by more cyclically oriented areas of the market, such as small-cap equities and the Financials, Communication Services, Industrials, and Energy sectors of the S&P 500 Index.
“We continue to believe that equity markets look attractive for 2025, with broader sector leadership and participation, thanks to improving fundamentals and a policy tailwind,” said Darrell Cronk, chief investment officer for Wells Fargo Wealth & Investment Management. “The incoming administration and congressional leaders want a fast start, with likely policy priorities including extending tax benefits, deregulation, tariffs, and tighter border control. We expect that these policies will support our guidance.”
Outlook on global economy and asset groups:
- Global economy: We believe the U.S. economy will lead the global economy, as economic recoveries in Europe, China, and emerging markets face significant headwinds.
- Global equities: We expect returns to be driven mainly by earnings growth, but valuations should remain supportive.
- Global fixed income: Short-term U.S. Treasury rates likely will fall with the Federal Reserve policy rate, but longer-term rates should rise with economic growth, tariffs, and immigration restrictions.
- Global real assets: We believe commodities are well-positioned to benefit from slow supply growth and a global demand rebound that is driven by a modest international economic recovery and lower global interest rates.
- Global alternative investments: Global alternative investments are likely to benefit from a pickup in merger and acquisition activity, lower cost of borrowing, and increasing confidence that economic growth is sustainable.
Top portfolio ideas:
- Prepare for abundant liquidity to diversify investment opportunities
- Position for a cyclical recovery but remain tilted toward U.S. assets
- Rethink investment income
- Consider expanding opportunities in artificial intelligence
- Keep extreme risks in perspective
Highlights of WFII’s forecast:
- The anticipated U.S. GDP (gross domestic product) growth target for 2025 year-end is 2.5%.
- The target for U.S. consumer price inflation in 2025 is 3.3%.
- The S&P 500 Index price target range is 6,500 – 6,700 for year-end 2025.
- The Federal funds rate forecast for 2025 is 4.00% – 4.25%, with 10- and 30-year U.S. Treasury yield forecasts of 4.50%-5.00% and 4.75%-5.25%, respectively.
The full report provides guidance for investors to help navigate the next 12 months, long-term themes that WFII believes are investable now, a closer look on sector and sub-sector preferences, as well as U.S. and international political risks that could impact investment returns. Please see the full report for detailed information.
Join the WFII 2025 Outlook call today, December 11, at 4:15 p.m. Eastern Time. Dial-in: 877-601-6604; Passcode: 71-306-44.
A summary of the WFII 2025 Outlook is available (PDF).
Investment and Insurance Products are: |
• Not Insured by the FDIC or Any Federal Government Agency |
• Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate |
• Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested |
Risk Disclosure
Forecasts and targets are based on certain assumptions and on our current views of market and economic conditions, which are subject to change.
All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful and meet its investment objectives. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Asset allocation and diversification do not guarantee investment returns or eliminate risk of loss.
Stock markets, especially foreign markets, are volatile. A stock’s value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. International investing has additional risks including those associated with currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility. These risks are heightened in emerging and frontier markets. Investments in fixed-income securities are subject to market, interest rate, credit, liquidity, inflation, prepayment, extension, and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in a decline in the bond’s price.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold, or sell securities. Do not use this report as the primary basis for investment decisions. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon.
About Wells Fargo Investment Institute
Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 34 on Fortune’s 2024 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.
Additional information may be found at https://www.wellsfargo.com/
LinkedIn: https://www.linkedin.com/company/wellsfargo
PM-06042026-7408492.1.1
News Release Category: WF-ERS