2024 was an eventful year around the world with elections held in more than 60 countries, representing nearly 50 percent of the world’s population. One of the most consequential results was Donald J. Trump winning the U.S. presidential election, who along with the Republican Party also won majorities in both houses of Congress. In addition to representing the third straight U.S. Presidential election during which the incumbent party lost, the year was notable for many additional incumbent losses around the world.

The U.S. economy continues to grow, albeit at a slower pace compared to the rapid rebound following the pandemic. Economic conditions are benefiting from strong consumer spending and a resilient job market with low unemployment. GDP growth is more moderate than in previous years, with 2025 projections indicating a 50-basis point decline in the rate of growth. While higher earners are enjoying a so-called wealth effect from gains in housing prices and the stock market, many lower-income consumers are relying on credit cards and other loans to support their spending, with signs of financial strain evidenced by rising delinquency rates. Numerous Americans have mostly exhausted their pandemic era savings and have generally been putting aside a smaller share of their annual incomes. While the U.S. economy remains on a solid growth trajectory, the outlook is clouded by navigating a complex environment marked by uncertainty surrounding lingering inflationary pressures. Furthermore, proposed regulatory, immigration, trade and tax policy heighten the potential for volatility.

Many perceive the incoming Trump administration and a unified government pointing to the U.S. entering a transformative period of growth-oriented policies and a strong pro-business environment. The proposed Department of Government Efficiency (DOGE) presidential advisory commission’s goal of restructuring the federal government and removing regulations to reduce expenditures and increase government efficiency, is anticipated to streamline operations and lowers taxes which should serve as a tailwind for the economy. Nevertheless, implementation of tariffs, risks of reaccelerating inflation, rising labor costs and a ballooning national deficit can limit growth and cause interest rates to rise. Several forces may fuel volatility during 2025 including elevated levels of inflation and interest rates, a wall of debt maturities, and geopolitical risks including the potential of physical conflict(s).