Investing.com – Wolfe Research recently identified five potential surprises for 2025 including a potential Fed pivot that could shake markets.
1. Port workers strike: A possible strike by port workers on January 15 — stemming from unresolved issues with automation in port operations — disrupting supply chains and potentially impacting GDP by about $3.1 billion per day.
2. Downward revisions to payrolls may force the Fed to shift: Upcoming record revisions could reveal a downward revision of about 68,000 jobs per month, signaling a slowing job growth rate that could prompt a dovish shift from the Fed.
3. Change of position of the Federal Reserve: The potential resignation of Deputy Chairman for Oversight Michael Barr could lead to major leadership changes, with Gov. Michelle Bowman poised to take over his role and Kevin Warsh likely being named the new governor.
4. The stock market rally is unlikely to expand: Despite investors' hopes for a broader market rally, concentration within the index may persist, Wolf Research said. This trend reflects a long-term pattern in which the equal-weight index has outperformed in seven of the past ten years.
5. President-elect Trump may choose less harsh tariffs: After initial market reactions to the tariff headlines, Trump may end his push for significant tariffs. This would challenge widespread investor expectations, with many anticipating increased tariffs on Chinese and other goods.
