1、Executive SummaryOver the past four years,the U.S.and global economy and markets have weathered a myriad of challenges,including:the pandemic-induced distortions in manufacturing and services activity,acute supply chain and labor force disruptions due to the pandemic and the war in Ukraine,the resul

2、ting global inflation surge,rapid and coordinated central bank policy tightening and the impacts on real economic growth,labor markets,consumer and producer prices and earnings growth.Yet,through these cyclical storms,the U.S.economy has maintained an above-average pace of real economic growth and r

3、isk assets have delivered strong returns above and beyond those found in cash.As 2024 was ending,these cyclical forces were making their way out of the economy and profits,with a normalization in real economic growth,job creation,inflation pressure and earnings growth as well as the level of interes

4、t rates.However,the U.S.economys momentum is downshifting into a more normal pace.While this alone is unlikely to trigger a recession,it does leave the economy more vulnerable to shocks,including those from significant policy changes that might be coming from Washington this coming year.Additionally

5、,the strong market performance of the past two years has left valuations elevated in certain markets and,importantly,portfolios unbalanced by asset class,sector and style and region.As the cyclical storm passes but the policy fog settles in,the number one action call for investors is to ensure portf

6、olios are rebalanced after a few very abnormal years.2025 Year-Ahead Investment OutlookOut of the Cyclical Storm and into the Policy Fog2Out of the Cyclical Storm and into the Policy FogEconomy:A post-cycle economy faces greater policy uncertaintyClearer skies on the cyclical climateThis year,the ec