I’m Ali Dellinger, Sr. Director of TIAA Wealth CIO Communications, and I’m excited to share highlights from our Wealth Management 2025 Midyear Outlook. This outlook, titled “Charting Potential Outcomes,” is focused on our forward-looking views and the wide range of potential outcomes for financial markets during the second half of 2025.

But before we look ahead, it’s important to recount how we got here after a turbulent start to the year. In our 2025 Outlook titled “Finding Balance: Fiscal Adventures versus the Bond Market,” we outlined three key views:

• First, that bond market volatility would be elevated.
• Second, that policy would be a key driver of markets outcomes.
• And third, that global economic fragmentation would accelerate.

Over the first six months of the year, the implementation of President Trump’s economic agenda has reinforced these views.

While uncertainty remains around the continued sequencing of President Trump’s policy priorities and their impacts on the economy, we expect markets to be driven by four themes over the next six months.

• The ongoing implementation of the new higher-tariff regime.
• The ramifications of another multi-trillion-dollar fiscal package.
• How quickly and effectively deregulation happens.
• And what role the Federal Reserve decides to play.

Our base-case scenario assumes that politics and court rulings are going to lead to a gradual stabilization of trade tensions, and the Trump administration will pivot towards a more market-friendly policy mix—prioritizing tax cuts and deregulation. In our view, this scenario would warrant modest yet positive equity gains in the second half of the year. Markets may continue to experience bouts of volatility caused by policy noise and occasional surprises in jobs or inflation data, but the economy will be more attuned to continuing shifts in Washington. Bond yields could also stabilize, removing a source of economic pressure, and gradually decline as this outcome may enable the Federal Reserve to begin cutting interest rates.

As we adapt to this evolving environment—both in the U.S. and globally—we believe investors are best served by remaining anchored to their long-term investment strategies. We hope that this Outlook will help bring context for what may lie ahead.