Oakleigh Capital Management Newsletter

Issue Date: February, 2025

Welcome to the Oakleigh Capital Management Newsletter!

Dear Investors,

As we navigate through the first half of 2025, we bring you an insightful overview of the global macroeconomic landscape, providing the context for our strategic investment decisions at Oakleigh Capital Management.

Global Macro Economic Outlook

United States:

Growth Expectations: The U.S. economy is projected to grow at about 2.1% in 2025, with a slight deceleration expected towards the end of the year due to emerging trade policies and immigration restrictions. The effects of recent policy changes, including potential tariff impositions, are anticipated to influence consumer spending and real disposable income.

Inflation and Monetary Policy: Inflation is expected to see a mild rebound towards the end of 2025, potentially reaching 2.4% by late year, driven by higher labor costs and import prices. The Federal Reserve is likely to continue its path of interest rate adjustments, aiming for a terminal rate of 3.25-3.5%.

Europe:

Growth Outlook: The Eurozone is projected to see GDP growth of 1.2% in 2025, with Germany lagging and Spain performing better than the average. The European Central Bank is expected to lower its policy rate to 2.5% by mid-year, reflecting a response to subdued economic confidence and ongoing disinflation.

Inflation Trends: Inflation in the Eurozone should moderate to around 2% by late 2025, although services inflation remains a variable to watch.

Asia-Pacific:

China: Economic growth in China is forecasted to slow to 4.5% in 2025, impacted by domestic demand issues and potential tariff escalations from the U.S. However, policy measures aimed at stimulating the economy might mitigate some of these effects.

Japan: Japan's economy is expected to see growth with a policy rate increase to 0.75% by year-end, as inflation stabilizes around 2%, marking a departure from long-standing deflationary pressures.

Emerging Markets:

General Trends: Emerging markets are set to experience a mixed bag; growth is expected to be robust in regions like South Asia, particularly India, with forecasts at 6.4%. However, trade tensions could pose risks, especially for countries heavily reliant on exports to major economies.

Specific Regions: Latin America, MENA, and Sub-Saharan Africa might see an uptick in growth, driven by domestic demand and commodity price stabilization.

Global Challenges and Opportunities:

Trade Policy: Increased protectionist measures, particularly from the U.S., could introduce volatility in global trade, affecting growth projections and corporate earnings.

Inflation Management: While inflation is generally trending downward, services inflation remains stubborn, suggesting a cautious approach to monetary policy normalization.

Geopolitical Risks: Ongoing regional conflicts and policy uncertainty continue to pose risks, potentially impacting oil prices and broader market sentiment.

Conclusion: Despite the complexities of the current global economic environment, our team at Oakleigh Capital Management remains committed to navigating these waters with agility and insight. We anticipate a cautious but proactive approach to investment, balancing growth opportunities with risk management.

Thank you for your continued trust in Oakleigh Capital Management. We look forward to guiding you through these dynamic economic times.

 

Best regards,


Oakleigh Capital Management

Please note that this newsletter is for informational purposes and does not constitute investment advice. Always consult with a financial advisor before making investment decisions.