As we enter the second quarter of 2025, there is much to consider for fixed income markets and the broader economy.

The opening quarter of 2025 was a roller coaster ride for investors, beginning with optimism but ending with considerable turmoil.

America – or at least the Trump Administration – and Europe are clearly seeing the world differently these days.

This piece is the third in a three-part series on the issues that led to 2024’s anti-incumbent party backlash. Here, we evaluate the trade and other fiscal proposals put forward by the incoming Trump administration, as well as their investment implications.

U.S. stock markets experienced positive performance in 2024, and that trend is expected to continue in 2025. However, 2025 also has the potential to experience increased market volatility and shifting trends due to policy changes from the incoming administration combined with uncertainty about inflation and global economic conditions.

Given the substantial price action in rate markets, we consider what outcomes the market is currently pricing, the risks to this “consensus” view, and what we think will or will not occur as the new administration begins its term.