Vanguard economic and market outlook for 2025: Beyond the landing

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As interest rates return towards neutral, we expect them to settle at higher levels than in the 2010s. This environment sets the foundation for solid fixed income returns over the next decade.
Positive labour supply and productivity developments drove US growth in 2024. Whether these drivers wane or accelerate, coupled with demand factors such as fiscal stimulus, holds the key in 2025.
The possibility that we are experiencing a valuation-supporting productivity boom must be balanced by the risk that economic developments could expose the vulnerability of stretched equity valuations.