Investing.com — Wolfe Research recently outlined five potential surprises for 2025 including a possible Fed pivot that could shake up markets.
1. Port workers strike: a possible port workers strike on Jan. 15 — stemming from unresolved issues regarding automation in port operations — disrupting supply chains and potentially impacting GDP by approximately $3.1 billion per day.
2. Downward revisions to payrolls may force Fed pivot: The upcoming benchmark revisions could reveal a downward adjustment of around 68,000 jobs per month, indicating a slowing job growth rate that may prompt a dovish pivot from the Fed.
3. Shake up at the Fed: The potential resignation of Vice Chair for Supervision Michael Barr could lead to significant changes in leadership, with Governor Michelle Bowman poised to take over his role and Kevin Warsh potentially being appointed as a new governor.
4. Broadening out of stock market rally unlikely: despite investor hopes for a broader market rally, concentration within the index may persist, Wolfe Research said. This trend reflects a longer-term pattern where the S&P 500 has outperformed the equal-weight index in seven of the last ten years.
5. President-elect Trump may opt for less harsh tariffs: after initial market reactions to tariff headlines, Trump might end his pursuit of significant tariffs. This would defy widespread investor expectations, as many anticipate increased tariffs on Chinese goods and others.