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Economy & Markets 

  • The economic impact of the government shutdown has yet to be determined but will likely have a negative effect on fourth quarter growth. However, continued spending by high income households along with robust capital expenditures on AI infrastructure should offset this temporary weakness and remain as the key growth catalysts for the remainder of 2025. 
  • Tariff levels continue to fall from their peak on “Liberation Day” due to negotiated trade agreements and exemptions. Businesses are absorbing some of the higher costs thereby limiting price increases to consumers. However, inflation remains elevated with low and middle-income households struggling to keep up with the rising costs of living.

 Equities

  • In October, the S&P 500 advanced by 2.34%, continuing its upward trend. Growth stocks maintained leadership across market capitalizations, particularly within the large-cap technology sector, bringing the index’s year-to-date return to +17.5%. International equities also delivered positive results, gaining 2.02% for the month, slightly lagging domestic markets.
  • The S&P 500 forward P/E multiple continued to expand, closing the month at 23x. Consensus estimates point to strong corporate profit growth ahead, with projections of +10% for 2025 and approximately +13.7% for both 2026 and 2027. 

Fixed Income 

  • The FOMC delivered another 25-basis point rate cut at their October meeting. Chairman Powell indicated that another rate cut in December is far from certain.
  • Credit underperformed as spreads moved wider. Investment grade increased by 5-basis points and high yield by 9-basis points. While credit spreads remain historically tight, all-in yields are still attractive.

 Employment

  • The latest ADP report reaffirmed a slowly growing labor market. However, small businesses, which employ nearly half of all U.S. private sector workers, have lost 130,000 workers this year.
  • Layoff announcements by firms such as Amazon, the nation’s second largest private employer, and Microsoft have surprised employees as planned increases in productivity through investments in technology have threatened many white-collar jobs.

Federal Reserve 

  • As expected, the Fed cut rates by 25-basis points at their October meeting. When Chairman Powell delivered his post meeting comments, he said the chance of another cut in December was “not a foregone conclusion, far from it”, thereby deflating investor hopes and causing a sell off in markets.
  • Growing weakness in the labor market is the primary concern of the Fed right now. Complicating the job of the Fed is stubbornly elevated inflation. The latest reading on inflation showed a still high 3.0% Core CPI level.

Issues to Watch

  • The Supreme Court is deliberating over the legality of President Trump’s Tariffs. If the court rules against the tariffs it is widely expected that the Trump administration will seek alternative methods to implement its trade agenda.
  • The November election results sent a strong message to Republicans that their slim majorities in the House and Senate could be at risk next year.

Chart of economic metrics

1 Data provided by Bloomberg. Metrics are as of month-end or most recent publication
2 Provided by U.S. Real GDP Economic Forecast Survey Median
3 Provided by World Real GDP Economic Forecast Survey Median
4 Provided by Bloomberg Intelligence Forecast
5 Provided by World Probability Forecast
6 Arrows represent a month-over-month change

Chart of index returns

Asset Allocation / Tactical Positioning - November 2025Chart of asset class

7Equity tactical weights are relative to the Cambridge Trust Wealth Management Core Equity allocation and is comprised of 80% S&P 500 and 20% MSCI AC World ex-U.S Index.
8Fixed Income tactical weights are relative to the Cambridge Trust Wealth Management Core Taxable allocation and is comprised of 100% Barclays Intermediate Gov/Credit Index.
9Below investment grade holdings include high yield and emerging market debt mutual funds. Represents an out-of-benchmark allocation that will be reflected as an overweight position relative to the Barclays Intermediate Gov/Credit Index if any allocation is held.
10Alternative tactical weights represent an out-of-benchmark allocation that will be reflected as an overweight position when utilized and neutral position when not.
11Direction arrow highlights any recent changes of the overall allocation after a recent tactical asset allocation or strategy change. Last changes were made at September 2025 Asset Allocation Committee meeting.

Views are as of November 2025 and are subject to change based on market conditions and other factors. The opinions expressed herein are those of the author(s), and do not necessarily reflect those of Eastern Bankshares, Inc., Eastern Bank, or any affiliated entities. Views and opinions expressed are current as of the date appearing on this material; all views and opinions herein are subject to change without notice based on market conditions and other factors. These views and opinions should not be construed as a recommendation for any specific security or sector. This material is for your private information, and we are not soliciting any action based on it. The information in this report has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is neither representation nor warranty as to the accuracy of, nor liability for any decisions made based on such information. Past performance does not guarantee future performance.