Global traders predict that tariffs and inflation will be the biggest factors influencing global markets in 2025.
Traders around the world expect tariffs and inflation to be the biggest factors affecting global markets in 2025 and are prepared to deal with volatility, according to an annual survey of institutional trading clients released by JPMorgan Chase (JPM.N) on Feb. 5.
Inflation is the top concern
JPMorgan Chase Bank said that 51% of 4,233 people surveyed said that, inflationary and tariffs are the most important factors likely to drive markets this year. Last year, inflation was also a top concern, but only 27% of respondents mentioned it.
US President Donald Trump has threatened to impose tariffs on foreign imports and target specific industries or countries, roiling markets this year.
Major stock indexes fell on February 3 after President Donald Trump announced on February 1 that the US would impose new tariffs of 25% on imports from Mexico and Canada and 10% on Chinese goods. However, the market recovered the next day (February 4) when the president postponed the tariffs on Mexican and Canadian goods.
Many investors in the market consider tax policy Customs is a factor that increases inflation.
“ At the beginning of the week, we saw a significant increase in activity from traders, trying to rebalance their portfolios due to 1 to 2% moves in currencies such as the Canadian dollar, Mexican peso and Chinese yuan traded offshore, ” said Chi Nzelu, global head of fixed income, currencies and online commodities trading at JPMorgan.
On the other hand, the number of traders who believe a potential recession could hit the market this year has dropped to 7% from 18% in 2024.
Volatility, one of the biggest challenges
When asked about the biggest challenge in 2025, volatility was the most mentioned topic by traders, echoing concerns from 2024. This year, 41% of those surveyed considered it a top challenge, compared to 28% in the 2024 survey.
“ What’s different this year is that the timing of the volatility has been somewhat unexpected. Unlike in the past, when volatility was tied to scheduled events like elections or non-farm payrolls data, we’re now seeing more sudden volatility in response to news related to the administration’s plans, leading to knee-jerk reactions in the market, ” said Eddie Wen, global head of digital markets at JPMorgan.
JPMorgan's electronic trading report also asked traders about their biggest concerns related to market structure, with access to liquidity, regulatory changes and access to market data and costs being the top issues.
One of the trends JPMorgan noted in the survey was the rise in electronic trading, with forecasts that electronic trading will increase across all traded products next year, from emerging market interest rates to commodities and credit spreads.
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