Q4 Capital Markets Review
Both global equities and fixed income appreciated strongly during Q4 and delivered impressive returns for full year 2025. Tariff uncertainty continued to abate with the impact on inflation and corporate earnings much lower than initially feared. US economic growth continued to rebound strongly following a Q1 lull, buoyed by resilient consumption and booming AI capex growth. However, the US labor market has cooled substantially and is currently characterized as a low hire / low fire environment, which led the Fed to cut interest rates three times (75bps in aggregate) since September. Internationally, economic growth has stabilized in Europe and Canada, and the outlook appears brighter with significant fiscal policy spending likely to accelerate over 2026 and beyond.
