Traders Fear Tariff Turmoil as Inflation, Volatility Dominate 2025 Outlook

Global traders are bracing for a year of market turbulence, with tariffs and inflation emerging as the biggest potential market movers, according to a new survey by JPMorgan Chase. The bank’s annual poll, as reported by Reuters, revealed that 51% of its 4,233 respondents named the twin threats as the top market drivers for 2025.

This marks a significant shift from last year, when inflation alone was a primary concern for only 27% of respondents. The increased focus on tariffs stems from U.S. President Donald Trump’s unpredictable trade policies, which have already sent shockwaves through global markets.

“At the beginning of the week, we saw traders engaging in significantly more activity, attempting to rebalance their portfolios due to movements of 1 to 2 percent in individual currencies such as the Canadian dollar, the Mexican peso, and the offshore Chinese yuan,” said Chi Nzelu, global head of fixed income, currencies and commodities e-Trading at JPMorgan.

The survey also highlights a growing concern among traders: volatility. For 41% of respondents, this is the biggest challenge they anticipate facing in 2025. Unlike previous years, where volatility was often tied to scheduled events like elections or economic data releases, traders are now witnessing more sudden market fluctuations in response to headline news about the administration's plans.

“What distinguishes this year is the somewhat unexpected timing of volatility,” explained Eddie Wen, global head of digital markets at JPMorgan. “Unlike in the past, when volatility was tied to scheduled events like elections or nonfarm payroll data, we're seeing more sudden fluctuations in response to news headlines around the administration’s plans, leading to knee-jerk reactions in the marketplace.”

JPMorgan’s report also delves into traders' concerns regarding market structure, with access to liquidity, regulatory changes, and market data access and costs topping the list. The survey notes a trend towards increased electronic trading across all product categories, a shift expected to accelerate in the coming year.