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Quarterly Economic Report Q3 2025
Jon Schwartz, Jose Sevilla, Timothy Lee, CFA, Ivan Asensio, Ph.D., Darrell Leong, Steve Johnson, CFA, Christi Fletcher, Michael Duranceau, Edward Lee, Emelynn Abreu, Travis Dugan
Key takeaways
The SVB Asset Management Economic Report is a quarterly review and outlook on economic and market factors that impact global markets and business health.
01
The FOMC held interest rates steady for the second straight quarter.
Market expectations still lean towards two rate cuts in 2025.
02
Uncertainty remained around how tariffs will affect inflation.
The Fed stated that it expects inflation to rise in 2025, but then resume a disinflationary path in 2026.
03
The bond market was resilient and ended Q2 with solid returns overall.
Improved investor sentiment contributed to increased exposure to both corporate credit and US Treasury bonds.
The data
The job market remained steady.
Powell stated in June that conditions in the labor market are "broadly in balance and consistent with maximum employment."
Corporate credit spreads tightened in Q2 2025.
Despite tariff-related widening in April, credit spreads tightened back amidst improving investor sentiment.
"For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance."
Jerome Powell
Federal Reserve Board Chairman, June 18, 2025
The US bond market showed resilience.
Most segments achieved positive returns during Q2, contributing to solid year-to-date performance.
Sources: Bloomberg and ICE BofA Indices. Data as of 6/30/2025. Indices are unmanaged and cannot be invested in directly. Past performance is not a guarantee of future results.
Tech and communication stocks staged a comeback.
The S&P 500's performance was due in part to easing tariff concerns, robust corporate earnings and improved investor confidence.
Sources: Bloomberg and ICE BofA Indices. Data as of 6/30/2025. Indices are unmanaged and cannot be invested in directly. Past performance is not a guarantee of future results.
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