CNBC's Jim Cramer explores the major unknowns facing the economy in 2025, focusing on the 10-Year Treasury yield, labor market trends, Wall Street performance, and corporate earnings growth.
CNBC's Jim Cramer on Friday commented on the uncertainty of 2025, listing four key macroeconomic questions that are on his mind. He highlighted the unknowns surrounding the 10-Year Treasury, the labor market , Wall Street activity, and overall corporate earnings growth.
Cramer stated, 'At the start of every new year, I always try to figure out which stocks can work best over the next twelve months, but this year's different, precisely because there's just so much we don't know about what's coming.' He acknowledged that uncertainty is always present, but this year's stakes feel higher given the S&P 500's two consecutive years of 20% plus gains for the first time since the late nineties. The 10-Year Treasury yield climbed by more than 2 basis points to 4.6% on Friday, and Cramer questioned whether it will fall to 4%, rise to 5%, or remain around its current level. He observed that since the Federal Reserve's first rate cut, long rates — determined by the bond market — have surged. Typically, bonds and stocks move in opposite directions, so Cramer suggested stocks should perform well if the 10-year yield drops and be relatively stable if it stays between 4.5% and 4.6%. However, he warned that if long rates continue to climb and the 10-year reaches 5%, things could worsen. Despite the economy showing signs of softening in recent months, Cramer maintained that it remains strong, with low unemployment. He currently believes the labor market can stay robust. However, he speculated that mass deportations under President-elect Donald Trump could lead to a major labor shortage, potentially causing wage inflation
ECONOMY INVESTING STOCK MARKET LABOR MARKET INTEREST RATES
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