What we learned about 2024 is that many worries identified by analysts and market observers came to naught. Rates, economic growth, and inflation – all areas of concern last January – are in good shape as 2025 rolls out. More robust job growth than expected (see our Chart of the Week) is just one example. As one banker observed recently, what were headwinds have become tailwinds.

The focus now is on mostly global rather than domestic issues. Tariffs, trade, and geopolitical risks are taking center stage. Some of these are theoretical but could mirror events from 2017-2020. And while the rise of bond yields since the election suggest higher inflation to come, capital markets remain full speed ahead. Or as a recent Apollo research report put it, “firing on all cylinders.”

We also confirmed (and others learned) that public and private markets can each perform well without one side stealing from the other. Banks focus on larger syndicated corporate deals, and direct lenders on buy-and-hold traditional and upper middle market LBO financings. That distinction was highlighted by the broadly syndicated market’s record $1.6 trillion of loan volume last year, per LSEG LPC, of which only $84 billion – about 5% – represents new PE buyouts.