Economic and Market Review February 2025

• European equities outperformed the U.S., driven by defense stocks and a moderate recovery in industrial activity. • The U.S. housing market hit a historic low, with the Pending Home Sales Index showing the weakest January in 25 years due to high mortgage rates (7.04%). • The top 10% of earners now account for over 50% of total U.S. consumer spending, compared to 36% in the 1990s. • The consumer savings rate reached a 6 month high, with lower-income groups rebuilding savings, leading to a downturn in consumer spending. • Fund managers are increasingly worried about stagflation, and economic surprises have turned negative again in 2025. • U.S. physical gold supply is tightening, causing leasing rates to spike and price spreads between London and U.S. gold markets to reach a five-year high.

Is Your Portfolio and Retirement Safe from the Devasting Damage of Inflation?

Investors need to be aware that inflation damage compounds over time. We have undergone a secular change, and inflation will continue to move up over the medium term.