Download the January 2025 investment commentary.

Watch an excerpt of CIO Mike Sluder sharing his outlook for 2025 at the Synovus Personal Trust and Wealth Services webinar, Understanding Market Dynamics, held on January 29, 2025.

2024 Recap

The U.S. economy and equity markets exceeded expectations in 2024, with GDP growth projected between 2.7% and 3%, and the S&P 500 appreciating by 25%. This robust performance was underpinned by strong consumer spending and impressive corporate earnings from larger firms. Productivity levels reached historical highs, contributing significantly to growth and employment. The Federal Reserve successfully reduced inflation to approximately 2.5%, although it remains somewhat persistent.

The U.S. led the developed world in per capita GDP growth and wealth creation, with growth rates 2.5 to 3 times higher than those of Germany and France. The Fed's decision to cut rates by 100 basis points starting in September, coupled with strong fiscal spending, fueled asset appreciation and consumer spending. However, the increase in 10-year U.S. Treasury rates by about 100 basis points impacted mortgage rates, slightly dampening potential growth.

• U.S. Growth
• Strong Consumer
• Productivity
• Inflation
• Regulation
• Equity
• Fixed Income
• Private Equity
• Portfolio Market Positioning

2025 Outlook

The U.S continued to see impressive growth in 2024 and is expected to grow 2%-2.5% in 2025. Strong growth and employment have been supported by productivity that has historically been associated with boom times. The consumer, buoyed by strong balance sheets and notable increases in wealth continue to be the largest driver of growth.

The Fed has managed to drive inflation back down to acceptable levels but remains sticky around 2.5%. Proposed initiatives by the Trump administration are likely to keep inflation above 2%, with the potential to go a little higher.

The strong economy and potential proposed lessening of regulation and taxes are likely to reduce the number of expected interest rate cuts in 2025. Consensus is we will get one to two cuts in 2025. The uncertainty around tariffs and continued strong growth with less regulation will keep longer-term interest rates higher as well.

Our outlook remains cautiously optimistic, emphasizing the importance of maintaining a robust portfolio allocation with a long-term focus.

Download the January 2025 investment commentary.