Silicon Valley Bank – SVB Asset Management Views on Economic and Market Factors Affecting Global Markets and Business Health

This report analyzes economic and market conditions in Q4 2025 and provides an outlook for 2026.

The US economy showed resilient growth with inflationary pressures and a softening labor market. The US government shutdown disrupted data collection and consumer spending. GDP grew at an annualized 4.4% in Q3 2025, driven by consumer spending and trade. The Federal Reserve adopted a cautious monetary policy with expectations of two rate cuts midyear. Investment grade corporate bond spreads are at 15-year lows, reflecting strong credit fundamentals. The US labor market softened with job losses averaging 23,000 per month in Q4 2025. The Fed cut rates three times by the end of 2025. Tariffs contributed to inflation but may ease in 2026. The US equity market performed well, led by healthcare and technology sectors. The Treasury yield curve steepened due to lower short-term rates and stable long-term rates.