Monday Market Minute | Dec 30, 2024

2025 outlook — easing continues, trade risk looms, alternatives deliver

What Moved

As 2024 closed, Canadian private markets entered 2025 on solid footing. The BoC had delivered 175bps of cuts, bringing the overnight rate to 3.25%. Housing had recovered. PE deal activity had surged. Private credit portfolios performed through the transition. Crypto posted extraordinary returns. The one dark cloud: US tariff threats cast uncertainty over trade-dependent sectors of the Canadian economy.

Why It Matters

The 2025 playbook for Canadian alternative investors required balancing continued easing tailwinds against emerging trade risks. Private credit yields — while lower than peak — remained attractive at 7–10% for senior secured strategies. PE vintages from 2024 looked promising. Housing fundamentals remained structurally sound. The key portfolio construction question was how to maintain diversification while managing tariff-related concentration risk in trade-exposed holdings.

Signal to Watch

The first weeks of the new administration would reveal whether tariff threats were negotiating leverage or genuine policy intent. Early executive orders on trade would set the tone for Canadian private markets in 2025 — and determine whether the easing-cycle optimism would sustain or be tempered by geopolitical reality.

The Monday Market Minute is published weekly by Alts Insider for educational purposes only. It does not constitute investment advice. See our full disclaimer.