The long-US consensus trades with which markets started 2025 have been blown out of the water. Europe, China and a range of alternative plays take their place.

Tariffs, funding freezes, and spending cuts have caused investors to reassess. The chances of stagflation have grown, but policy will stabilise.

In a no landing scenario, US economic growth would continue to be resilient while Europe’s current slowdown would reverse.

A balance sheet recession would be marked by a deep and prolonged downturn across developed and emerging economies.

A soft-landing scenario would involve a slightly below trend slowdown across major economies, with no major shocks to knock markets off track.

A cyclical recession would see a moderate economic contraction followed by a return to growth in late 2024 or early 2025.

Profound changes across economies and markets make forecasting unusually difficult in 2024. Instead, we offer four potential paths the world could take.

With US labour markets still strong, the Federal Reserve is sticking to its “higher for longer” messaging. But the economy may see a shock next year.

The job prospects are still gloomy for young people in China, and the picture may get worse before it gets better.

November’s survey of Fidelity’s 150 sector analysts highlights the pain businesses and households are experiencing, but that inflation is already easing.