The Carson Group Investment Research team forecasts a strong US economy on the back of a solid consumer and improving economic sentiment
OMAHA, Neb., Jan. 14, 2025 /PRNewswire/ — Carson Group sees potential monetary and fiscal policy opportunities that could provide a steady tailwind for markets and the economy in 2025. At the same time, as the company points out in its 2025 Market Outlook, “Animal Spirits,” there is plenty of policy uncertainty ahead, both on the monetary and fiscal side, meaning it will be critically important to pay close attention to the potential opportunities and risks the new year will present.
“The economy is on solid footing right now thanks to strong income growth, solid household balance sheets, and recent improvement in labor productivity. And while the scars of higher interest rates and inflation are still with us, that’s not a reason to remain pessimistic,” said Ryan Detrick, CMT, Chief Market Strategist at Carson Group. “The market has a way of tuning out much of the noise, and we expect this trend to continue in 2025.”
As the research indicates, economic momentum will likely continue, in tandem with tailwinds from a Federal Reserve looking to normalize interest rates and pro-growth fiscal policy that lifts the national mood – which economists call “animal spirits.” Animal spirits are motivations to act, innovate, and invest on an economic scale. Carson sees this as a potentially powerful tailwind for the economy and markets this year, as 2025 represents a new start from the uncertainties the year before.
“Despite the foundation of positivity, there are still risks around the corner that investors need to consider. For example, the pace of rate cuts remains uncertain, and the incoming administration will need to release more details and information regarding tax policy, tariffs and other campaign promises,” explained Sonu Varghese, VP, Global Macro Strategist at Carson Group. To Carson Group, economic strengths outweigh the weaknesses and the areas of opportunity, such as easier Fed policy and tax cuts, outweigh the threats, including tariff uncertainty.
Additional takeaways from the 2025 Market Outlook include:
- Carson is overweight equities with a baseline target S&P 500 total return of 12-15% in 2025, based on the economic environment supporting further margin expansion and earnings growth.
- Carson remains overweight U.S. equities relative to benchmarks based on a stronger U.S. growth outlook than other developed market economies but sees potential for the rally to broaden within the U.S.
- Carson believes rates may fall modestly as the Fed continues to cut, despite rate uncertainty, making rate-sensitive bonds more attractive, but also calling for an allocation to non-bond diversifiers.
- Carson notes that the weakest area of the U.S. economy is housing, which is highly dependent on interest rates. Affordability has plunged, which in turn has weighed heavily on builder activity. The outlook notes that housing by itself should not pull the economy into a recession, but it’s a drag and something to keep an eye on.
Carson Group Investment Research believes in strategic long-term decision making. It’s important when making tactical investing decisions to first, do no harm. The 2025 outlook is a general guide for investors to help them achieve their long-term financial goals and focus on the real prize—living a life of freedom and purpose.
Visit Carson Group’s website to download the 2025 Outlook “Animal Spirits” and listen to Facts vs. Feelings podcast episode 118, available on Wednesday 1/15/25 on Apple podcasts, Spotify or YouTube.
About Carson Group
Headquartered in Omaha, Nebraska, Carson Group serves financial advisors and investors through its three businesses — Carson Wealth, Carson Coaching and Carson Partners. Carson Group has created an ecosystem dedicated to helping financial advisors unleash the full potential of their firms by providing marketing, compliance, technology, investment strategies, succession planning, M&A support, and coaching. The company currently manages more than $40 billion* in AUM and serves more than 50,000 families among its advisor network of 150+ partner offices, including 50+ Carson Wealth locations. For more information, visit www.carsongroup.com.
*Combined AUM of CWM, LLC and NWCM.
SOURCE Carson Group
