• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Editor's Pick

From macro to micro, from QE to AI: BofA forecasts the second half of the 2020s

by January 26, 2025
written by January 26, 2025

Investing.com – The 2020s kicked off with a global pandemic that forced billions of people into lockdown and heavy government stimulus measures in response to the crisis.

What followed was a boom in economic growth, a surge in inflation, and a jump in interest rates — all against an environment of renewed violence in several regions around the world and the emergence of artificial intelligence.

This has all translated into 563 rate hikes, $7 trillion in quantitative tightening, a cumulative $11 trillion US deficit, $36 trillion in national debt, and $1.2 trillion in annual US interest payments over the opening half of the decade, analysts at Bank of America flagged in a note to clients.

However, they argued that perhaps the biggest change for asset prices has come from an inflection in bond yields, which move inversely to prices. An uptick in benchmark 10-year US Treasury yields to their long-term average after a pandemic-era drop “has led to frequent booms and busts in asset prices, with the former more concentrated than the latter”, the analysts said.

“Ultimately, macro has dominated over the past five years,” they said.

But, as the back-half of the 2020s dawns, an “era of micro” may be about to begin, the analysts predicted.

“We think micro themes will dominate macro in the coming 5 years: tech transforming our economy against a backdrop of populism, AI resource bottlenecks, generational shifts in power and wealth, and a return of government fiscal discipline,” they wrote.

In particular, the change to a focus on micro trends will be driven by accelerating technological disruption fueled by the widespread adoption of AI in both businesses and societies, they said.

Productivity growth will have to increase in turn in order to justify soaring tech sector equity valuations and prices, while AI itself will require “more of everything — from resources to infrastructure”, the analysts argued.

“These huge funding requirements could not come at a less opportune time: record government debt and populist policies will prioritize breaking the inflation cycle in the US and reviving stagnant growth at the heart of Europe,” they wrote, adding that they foresee “backlashes” to the disruptive force of AI over the rest of the decade.

Generation Z, also known as “Zoomers”, will subsequently “have a major say in the government response and the extent to which AI disrupts our societies and the labour market, as well as how government debt is managed,” they said.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Mediobanca board to review MPS 13.3 billion euro bid on Tuesday, source says
next post
US House Republicans divided over how to pay for Trump’s tax cuts

You may also like

China central bank conducts 1.7 trln yuan of...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

ECB president fears loss of central bank independence

January 27, 2025

European tech shares tumble as China’s AI push...

January 27, 2025

Futures slip as investors eye China’s latest AI...

January 27, 2025

Markets may be repeating the mistake of 2019,...

January 27, 2025

How billionaire Caltagirone could influence Italy’s banking M&A...

January 27, 2025

How Italy’s MPS went from near collapse to...

January 27, 2025

Analysis-To weather Trump, emerging market investors look to...

January 27, 2025

Chinese AI startup DeepSeek overtakes ChatGPT on Apple...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 5, 2025
    • This California startup is cleaning water and removing CO₂ from the atmosphere — all at a reduced cost

      June 5, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (504)
    • Stock (6,426)

    Latest News

    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

    Popular News

    • Thai minister says aiming to beat 2025 export growth forecast
    • 3M raises lower end of full-year adjusted profit forecast on demand recovery

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy