Nobody puts ASI in the corner, except tariffs

Wells Fargo Research Team Wells Fargo

Summary

The Animal Spirits Index (ASI) had a soft close to 2024, dropping 0.44 points in December to its lowest level all year. Though the ASI remained in positive territory for all of 2024, it has softened considerably relative to the beginning of the year.

While oscillating consumer confidence and economic policy uncertainty weighed heavily on the ASI, financial markets showed remarkable strength and boosted the index throughout the year.

We suspect 2025 will present downside risk to the ASI. Though we look for the FOMC to continue its cutting cycle this year, which will likely boost the index, the potential implementation of tariffs has the scope to weigh on all components of the ASI.

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Wells Fargo Research Team

Wells Fargo

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