What’s the consensus outlook for 2025? That’s a tough question to answer. Consensus for what, exactly? Geopolitics (war)? Macro (US economic “exceptionalism”)? Markets (US “TINA”)? All of the above?

If we’re talking US monetary policy, the consensus isn’t 100bps of rate cuts anymore. Not after the December FOMC meeting, at which the Fed tipped two fewer reductions than conveyed in the September dot plot. As discussed here at some length on Christmas Day, markets are now priced for just ~37bps of easing from Jerome Powell next year, which is to say one fully-priced quarter-point cut with about even odds of a second.

It’s probably accurate to say most observers expect ongoing US equity outperformance. Indeed, the December vintage of BofA’s fund manager poll showed a plurality think US shares will be the best-performing asset in 2025, followed by stocks more generally (i.e., global shares) and Bitcoin (figure on the left, below).

Note that the S&P outperformed the MSCI all-country gauge excluding US shares by an astounding 25ppt in 2024. As the figure on the right, above, shows, respondents to BofA’s poll expect US small-caps to be the best-performing index, likely reflecting “Trump trade” optimism.

In any case — and in the spirit of 2025 prognosticating — I thought Chris Harvey’s top 10 surprises/predictions for the new year were worth highlighting, particularly on a day when market news was sparse.

Harvey is, of course, Wells Fargo’s US equities chief. Below, find 10 (abridged) themes inspired by Harvey’s longer year-ahead outlook.

1. Investors reward organic volume growth over pricing, a trend we first noted during 3Q24 earnings. Companies take notice and limit price hikes, a marginal positive for inflation reduction.
2. Consensus 2025 US GDP (now +2.1%) rises to mid-2% by spring, repeating the yearago 2024E trend. This could help propel equities higher in 1H25, but sets up a “normal” correction in the summer.
3. xAI’s Grok 3 and Meta’s Llama 4 LLMs, trained on record 100k GPU clusters (3x the standard), trounce previous LLM performance and put the scaling law debate to rest, kicking off the next leg of the AI-trade and a renewed arms race among hyper-scalers to build even larger training clusters.
4. Coinbase is added to the S&P 500 in 1Q25, coinciding with another step-up in investors’ risk appetite, Momentum style performance, and serving as another symbolic milestone for digital asset adoption.
5. CBO’s FY25 budget deficit forecast (now $1.89T) comes down on stronger capital gains revenue, providing a decent contrarian tailwind for Treasurys.
6. US places more tariffs on Chinese goods. China retaliates and circumvents. They continue to add accommodation to offset the tariff impact. The accommodation boosts their economy but not until late 2025. They ultimately aid the commodity complex causing a sharp reversal in fortunes for basic materials, which gets worse before it gets better.
7. Large-cap PMs finally benefit from their mega-cap underweights as looser regulation creates a balanced market, helping 2025 relative performance.
8. Housing market improves in 2H25 as 30yr mortgages (now 6.7%) hit 5.5% partly a function of lower rate volatility. Investors gain more confidence in a slow and steady Fed as forward guidance focuses on rate normalization compressing rate vol.
9. Inflation slowly fades from the current 3.3% core CPI. Fears that tariffs lift inflation prove to be misguided. Consumer demand eases in 2H25 keeping inflation in check.
10. Republican voter registration momentum continues, improving the party’s outlook for retaining House/Senate control in 2026. Nevada’s active voter registration edge flips from D to R for the first time since 2007.