Macquarie Outlook | Growth Opportunities Amid Rate Cuts

What's New: Macquarie Asset Management's 2025 outlook projects a constructive investment environment marked by falling interest rates and robust GDP growth, while flagging potential inflation risks and geopolitical tensions.

Why It Matters: After years of high inflation and restrictive monetary policy, 2025 could mark a return to more normalized financial conditions, creating opportunities across multiple asset classes while requiring careful navigation of emerging risks.

Big Picture Drivers:

• Moderating inflation in developed markets is enabling central banks to begin normalizing monetary policy

• Strong consumer fundamentals with rising real incomes and healthy household balance sheets

• Ongoing structural changes from deglobalization and demographic shifts creating long-term inflationary pressures

By The Numbers:

• Private infrastructure valuations trading at 14.0x EV/EBITDA, down from 16.1x in June 2022

• Global air traffic projected to grow 8% in 2025

• US Federal Reserve expected to reduce rates to around 3.82% by end of 2025

Key Trends to Watch:

• Surge in data center demand driven by AI adoption, with key markets growing 15-25% YoY

• Private credit expansion as direct lending gains market share from traditional banking

• Geographic diversification beyond core markets into Brazil, Mexico, Indonesia, India and Japan

The Bottom Line for Investors: While Macquarie maintains a positive outlook for 2025, success will require balancing growth opportunities with heightened volatility. Real estate emerges as their main overweight position, followed by infrastructure assets, with a neutral stance on equities and an underweight position in traditional fixed income, though opportunities exist in private credit markets.

Read Full Report