Commentary

Fourth Quarter 2025 Quarterly Business Cycle Update

The business cycle expansion continues amid a softer U.S. labor market.

By: Fidelity Asset Allocation Research Team

Updated: 10/16/2025

Key Takeaways

The U.S. business cycle remains constructive, backed by corporate earnings momentum and wealth powered high-end consumption.
Federal tax cuts approved in July will likely provide a modest lift to the economy and a pronounced boost to business cash flows and profits over the next 12 to 18 months.
The global economy remains in a solid expansion amid a variety of fiscal, monetary and trade policy crosscurrents.

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