Capital Markets Pick Up as U.S. Policy Settles

Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy, discusses the impact of U.S. policy changes on markets in 2025. He notes a decrease in policy uncertainty since the start of the year, citing deals with trading partners and a shift towards industrial policy as key factors. The reduced uncertainty has led to a pickup in capital markets activity, with increases in IPOs and M&A activity attributed to greater corporate confidence and available capital. Zezas connects this increased activity to broader market trends, including steeper yield curves and a weaker dollar, which he attributes to restrictive trade policy, a locked-in fiscal policy trajectory, and the Federal Reserve's tolerance for higher inflation.