14 Jan More volatile and constrained – the macro investment outlook for 2025
Key Points
- 2024 was another strong year for investors with shares up strongly on the back of better than feared growth & profits and global central banks cutting rates. Volatility was low and balanced growth super funds returned around 11%.
- 2025 is likely to see positive returns but after the strong gains of the last two years, its likely to be more volatile and constrained, particularly as Trump returns with populist policies. A 15% plus correction is likely along the way.
- We expect the RBA to cut the cash rate to 3.6% with the first cut looking like it could be in February, the ASX to return around 7% and balanced super funds to return around 6%. Australian residential property prices are likely to soften further ahead of support from rate cuts.
- The key things to watch are: interest rates; recession risk; a likely trade war; China; and the Australian consumer.