The Financial Industry in 2025: A Retrospective
Shabnam Sorkhi | NOV 9, 2025
The defining story of 2025 is not a single headline. It is a set of linked forces that changed how the financial industry thinks about risk and allocation: the dollar moved from backdrop to policy tool; hard assets shifted from optional to necessary; credit signaled first, and public prices challenged private valuations; and emerging markets became a clean way to express the macro.
Author - Shabnam Sorkhi
One. The dollar became a policy tool, not a backdrop
In 2025, the working assumption around trade policy flipped: instead of treating tariffs as inflationary and dollar-supportive, the market increasingly treated them as growth-negative and dollar-weakening. That shift put currency in the foreground. Once FX is treated as policy, it becomes a first-order input to earnings, spreads, and fund flows, not just a housekeeping task.
The practical consequences follow directly from that view. International equity and bond sleeves no longer default to being fully hedged. Where the macro case argues for it, currency is allowed to contribute to returns rather than being neutralized. Local-currency fixed income is used expressly to carry the dollar view, not incidentally. Sector and regional tilts also line up with the thesis: basic materials, energy supply chains, and exporters with non-USD revenue gain relevance; selective non-U.S. value re-enters the conversation for the same reason. None of this requires speculation about who did what; it is the straightforward portfolio expression of a dollar that is being managed through policy rather than left to drift.
Two clarifications matter here. First, the dollar story is not linear. There were short-term bounces, but they did not erase the broader weak-USD framework. Second, the dollar view interacts with everything else below. Credit, commodities, and EM all read through it, which is why the year’s other signals are easier to understand if you start here.
Two. Hard assets moved from optional to necessary
Gold’s performance turned a theme into a policy. The initial acceleration was sharp, but the more important point is that the bid persisted and broadened. Miners, which had lagged spot for years, finally began matching in April and then, in stretches, led. That alignment is what shifts a metals sleeve from tactical to strategic.
Silver provided a simple decision level. A sustained break through the mid-30s switched the conversation from “if” to “how much” and “in what form.” The implementation was straightforward: buy metal for purity, miners for operating leverage, or long-dated out-of-the-money calls on a silver ETF as a defined-risk expression. The point was not to forecast every tick; it was to set rules before the tape moved and to size positions so a right-tail outcome could actually matter at the portfolio level.
By mid-year and again in late October, investors holding a configuration of gold, silver, miners, and platinum alongside EM-local debt and non-U.S. value were clearly well-positioned. The strength in metals and the broader macro alignment validated that setup. Hard assets were not a side bet; they sat within the same framework that linked currency, terms of trade, and policy risk. The takeaway is simple: when the dollar is the central macro variable, metals can play a meaningful role rather than a token one.
Three. Private credit signaled trouble first
Private equity operated in a tougher environment for exits and fundraising, and attracted most of the daily attention, yet the clearer signal came from private credit, where signs of stress appeared first. Publicly traded BDCs, which hold loans described as substantially similar to those in private vehicles, traded at persistent discounts to published NAVs. A visible gap between public prices and posted private marks is not just a footnote; it changes behavior. The industry consequences are mechanical: new capital slows when comparable risk can be bought at a discount in the public market.
Four. Emerging markets were a straightforward way to express the macro view
Money began to move into EM, where balance sheets looked cleaner. In a softer-dollar environment, commodities and international equities were expected to benefit, putting non-U.S. exposure back in focus. That showed up in positioning, notably Latin America (e.g. Brazil and Colombia). Even when a short-term dollar bounce was anticipated, the stance was to keep international equity funds, treating it as a counter-trend within a broader downtrend; that is, stay with EM and non-U.S. allocations rather than unwind them.
Five. Policy signals that moved markets
Two policy signals stood out in 2025, not because they changed the official settings on the day, but because they reset expectations.
Mid-year: A U.S. debt-quality scare reframed sovereign risk and reminded markets that the “risk-free” curve can carry real beta. The effect ran through duration and funding assumptions, prompting a fresh look at liquidity and stress tolerances. The takeaway was practical: portfolios had to account for a higher-volatility Treasury backdrop.
Late October (as of this writing): At the FOMC press conference, Powell said a December rate cut was not assured. Front-end yields moved higher by a little over 10 bps and the dollar gained roughly a handle, with many reading the USD as starting to break out from a base.
Where this leaves the remainder of 2025
As of early November 2025, the setup looks like this: The dollar has firmed recently alongside a divide over near-term rate cuts, a mix that has made equities feel choppy. Rate sensitivity leans on valuations, leadership narrows toward mega-caps, and smaller, more cyclical names lag.
For non-U.S. exposure, the weak-USD framework still underpins interest in international value, with the short-term dollar bounce treated as a detour rather than a regime change.
The credit picture still matters. The visible disconnect in publicly traded vehicles tied to private loans has been the reference point for how the space was discussed through the fall.
In hard assets, the view stays constructive over the long run, but runs through a consolidation. Metals led earlier, miners caught up, and the next leg depends on the dollar’s path rather than a single headline.
On policy, mid-year’s U.S. debt downgrade and late-October guidance reset expectations without changing the official settings. The result is a more volatile Treasury backdrop and a dollar that can move cross-asset pricing quickly, which argues for keeping position sizes measured into year-end.
Principles that Last: From 2025 into 2026
Own the view and size it to last. If you have a macro view, show it across equities, bonds, commodities, and other exposures, and keep it at levels that can handle sudden shifts. Set simple rules in advance for when to trim and when to add. Let credit speak first: public credit prices can give the early read on stress and often move before equities. Keep hard assets in the conversation; gold, silver, and miners earned a place alongside other macro expressions, and the case doesn’t disappear because of one headline. Express the macro simply; use straightforward ways to reflect your big idea (e.g. currency and terms-of-trade effects) rather than structures that blur the signal. And, treat words as risk: the 2025 headlines showed that guidance can move the path even when policy does not change. Plan for detours without abandoning a sound view.
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