Wolfgang von Hessling, Chief Economist, LGT Bank:

LGT Chief Economist: Recession Risiks in Europe. (Image: Courtesy)

The success of Swiss private investors in 2025 will depend largely on the pace and extent of monetary easing in the U.S. and Europe. After noticeable disinflation on both sides of the Atlantic last year, further significant interest rate cuts are expected in 2025, particularly in the first half of the year.

For U.S. monetary policy, alongside inflation dynamics, the pace of cooling in the U.S. labor market will play a crucial role. In Europe, the sharper disinflation significantly supports the outlook for ECB rate cuts; however, the extremely subdued demand and growth dynamics in Europe also pose recession risks, which could create headwinds for risk assets.

However, if global economic growth can hold up reasonably well, the monetary policy support should help brighten the dynamics of financial markets.