As 2025 came to a close, the economic picture looked largely familiar. Unemployment remained low, consumer spending held up, and inflation continued to ease gradually, even if it stayed well above long-term targets. Policy uncertainty never fully faded, but it also failed to disrupt growth in a meaningful way.

Markets reflected that ambiguity. Some investors positioned for a resurgence in inflation, others for a sharper slowdown. Neither scenario fully played out. Instead, markets moved unevenly through the year and still produced solid results. U.S. equities finished 2025 up roughly 17%. Markets outside the U.S. were stronger, with both international and emerging market equities posting gains north of 30%. Fixed income also contributed, with bonds benefiting from higher starting yields and a more stable rate environment.

And then the calendar turned.