Investing.com -- The United States is set to maintain its leadership role in global economic growth throughout 2025, according to Wells Fargo’s recent note.
Analysts at the bank forecast robust and more balanced growth across various sectors, supported by improving conditions in previously weaker segments of the economy.
Wells Fargo (NYSE:WFC) highlights several factors driving this momentum. Lower borrowing costs and early-year disinflation are expected to boost real wage gains, particularly benefiting lower-income households.
Additionally, the bank says manufacturing should gain strength from more balanced spending between goods and services.
"Easier credit access and deregulation should help struggling small businesses and support job creation," the bank writes.
Despite this optimism, Wells Fargo acknowledges uncertainties surrounding President-elect Donald Trump’s proposed policies, including tariff increases and tighter immigration controls.
The analysts expect announcements early in the year but caution that these policies could "dampen economic growth by early 2026" and exacerbate inflationary pressures in the latter half of 2025, depending on their timing and scope.
Wells Fargo’s economic outlook underpins a strong conviction in diversified investment strategies favoring U.S. assets. The bank anticipates broader corporate earnings growth, extending beyond mega-cap companies to cyclical and economically sensitive sectors like Communication Services, Energy, Financials, and Industrials.
For fixed income, Wells Fargo says it prefers intermediate (3-7 years) and longer maturities as yields rise. Additionally, the bank highlights the importance of maintaining exposure to commodities, which it views as a hedge against inflation amid tight supply-demand conditions.