Outlook for the second half of 2025: what can we expect?

June 2025 by André Themudo

As we move into the second half of 2025, the global economic landscape is transforming at an even faster pace. Structural forces that have long shaped the economy, from geopolitical fragmentation to the evolution of the global economy, are now colliding with abrupt shifts in US policy. The introduction of across-the-board tariffs, particularly on Chinese imports, marks an abrupt acceleration of this process, potentially raising effective US tariffs to their highest levels since the 1930s.

Despite this disruption, macroeconomic constraints remain unabated. These “binding economic rules” continue to serve as an anchor for markets, mitigating the impact of political shocks and sustaining a risk-friendly stance. For investors, the gradual blurring of the line between short-term and long-term dynamics raises fundamental questions: How to position yourself in a world where cyclical signals and structural changes converge? How can portfolios take advantage of this transformation, rather than simply react?

Structural economic rules

Recent changes in US trade policy now face structural constraints in the economy, particularly with regard to debt financing and the resilience of supply chains. This analysis focuses on these macroeconomic fundamentals rather than on specific policy changes.

A clear example: global production chains cannot be reconfigured quickly without causing significant disruption. The most recent trade measures in the US highlight this limitation. According to US census data, China remains a key supplier of critical minerals, semiconductors, industrial components and auto parts. The imposition of tariffs can therefore increase costs, hinder access to strategic raw materials and interrupt production lines. These constraints help explain why we anticipate a stabilization of US policy over a tactical horizon of six to 12 months, even in a context of short-term volatility. We therefore maintain a constructive view on developed market equities.

Critical Investment Issues

This context challenges traditional investment models and raises strategic questions for global markets. One of the most important is: What will be the future role of US Treasury bonds in portfolios?

Historically used as a hedge in times of risk aversion, long-term US bonds have proven less effective in this role. 

At the same time, the dollar depreciated against major currencies during the correction of risk assets in April — unusual behavior by historical standards. In our view, the dollar’s status as a safe haven asset is being reassessed. In contrast, gold reached historic highs, reflecting the demand for defensive alternatives and, therefore, we expect it to play a more relevant role as a risk diversifier in portfolios.

Other strategic issues are also in focus: How to invest in a rapidly changing market? How to take advantage of the ongoing structural transformation? Will there be a reinforced preference for domestic markets? And does it still make sense to allocate capital for longer horizons?

The current concentration of the stock market, largely driven by artificial intelligence, brings opportunities — but also risks. We believe that this scenario requires more selective and deliberate risk management. We believe that the ability to take advantage of structural changes in transition phases could generate relevant incremental returns.

In this context, we see value in a more specific approach, with a sectoral focus. The ongoing global transformation is generating a growing demand for private capital, but maintaining interest rates above pre-pandemic levels could pose an additional challenge to future returns in this segment.

We consider it essential to adopt a more selective, specific and structural megatrend-oriented investment approach. The ability to anticipate and adapt strategies to transformation cycles will be crucial to generating value. The second half of 2025 will require tactical agility, analytical rigor, and a clear understanding of the profound forces that are reshaping the global economy.