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    Outlook for 2025: The year of discontinuity

    Outlook for 2025: The year of discontinuit

    29 January 2025 Currency, Video

    Francesca Fornasari, Head of Currency

    Key takeaways

    • Tariffs will probably be the most consequential development of 2025 globally and could produce uncomfortable trade-offs for the Federal Reserve.
    • Decelerating migration in developed markets could negatively impact growth and worsen the trade-off between growth and inflation.
    • High government debt to GDP ratios in developed markets, combined with sticky inflation, high interest rates and lack of fiscal consolidation could further complicate life for central banks.
    • While some geopolitical risks will improve, the overall backdrop is likely to remain elevated, with the US potentially transforming from the global leader to a global disruptor.
    • We think investors should attempt to be nimble and seek assets that can perform amid higher volatility.
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