Investing.com — Wolfe Research recently outlined five potential surprises for 2025, including a possible Fed U-turn that could shake markets.
1. Strike of port workers: a possible strike by port workers on January 15 — stemming from unresolved issues related to the automation of port operations — disrupting supply chains and potentially impacting GDP by approximately $3.1 billion per day.
2. Downward payroll revisions may force Fed to pivot: Upcoming benchmark revisions could reveal a downward adjustment of around 68,000 jobs per month, indicating a slowdown in the rate of job growth that could prompt the Fed to take a sharp turn.
3. Shake it up at the Fed: The potential resignation of Vice President for Oversight Michael Barr could lead to significant leadership changes, with Gov. Michelle Bowman poised to take over his role and Kevin Warsh potentially being named the new governor.
4. It is unlikely that the growth of the stock market will spread: despite investors’ hopes for the broader market, concentration within the index could persist, Wolfe Research said. This trend reflects a longer-term pattern in which the index has outperformed the equal-weighted index in seven of the past ten years.
5. President-elect Trump may opt for less harsh tariffs: after initial market reactions to the tariff headlines, Trump may end his pursuit of significant tariffs. That would defy widespread investor expectations, as many predict an increase in tariffs on Chinese goods and others.
