The hope is for enough positive GDP momentum to keep adding new jobs and improving productivity. December’s labor report showed 256,000 job adds, and core CPI decelerating modestly to 3.2%. And while other inflation data remained stubbornly above the Fed’s target, investors should draw confidence from a resilient backdrop. At a portfolio level, we have also seen companies adapt to higher-for-longer, keep cash levels robust.

Rate stability creates more certainty around valuations, which we expect to lead to meaningful pick-up in M&A activity. This builds on the trend we saw in 2024, when North American M&A reached over $1.5 trillion by the end of Q3, not far off the 2023 full-year $1.7 trillion total.

▶︎ Read Jan 20th, 2025 Newsletter: here