Equity markets have followed diverse paths in the first three months of 2025. We think several factors are now in play that will influence the direction they take from here.

Higher productivity has propelled the U.S. economy ahead of its major peers in recent years, offering a blueprint for other countries and raising the stakes in the global race to harness emergent technologies such as GenAI.

U.S. government borrowing costs on longer-maturity debt have risen more quickly than on shorter-maturity debt since so-called reciprocal tariffs were announced. We discuss what drove that reaction and why the difference is likely to persist.