MIDYEAR OUTLOOK 2025
Pragmatic Optimism, Measured Expectations
[ Click to see full report PDF ]
We started 2025 on a high note, although we acknowledged that “no market environment is ever permanent, and that change is always potentially around the corner.” Well change did come, and with it, volatility, perhaps in part because we assumed President Trump’s policies would simply mirror those of his prior term.
The impact of policy direction has been central to market direction this year. Uncertainty around trade policy dominated the stock market’s path in the first half of the year and will continue to play a large role in the second half.
In the second half of the year, LPL Research expects to see slower economic growth, a weakening job market, and a slight uptick in inflation as the delayed effects of trade policy begin to take their toll. This will make things more challenging for the Federal Reserve (Fed), whose job is to keep inflation in check and maintain maximum employment. With a full plate to balance, the federal funds rate (which affects interest rates) will likely remain higher for longer.
To learn more about the opportunities and challenges to be on the lookout for through the end of this year, read the 2025 Midyear Outlook today (see links above).
