The optimistic view on money market fund inflows during the recent rate cut cycle appears to have largely come to fruition. This development diminishes the prospects for Federated Hermes' money market assets under management to maintain the double-digit growth seen in the 2023-2024 period. Future expectations for substantial money fund growth are tempered, which was previously a distinguishing favorable factor for Federated Hermes.

In recent assessments concerning various financial sectors, it was noted that alternative asset managers are likely to benefit from strong secular tailwinds, with particularly favorable prospects for the retail and wealth sectors. Conversely, exchanges might face challenges in flourishing market conditions, resulting in slower growth compared to more asset-sensitive sectors like asset managers and some brokers. Speculations suggest that certain Trump administration policies could benefit energy exchange businesses; however, growth prospects in other asset classes appear less promising. The brokerage sector is anticipated to thrive moving into 2025, supported by resilient short-term rates that could bolster margin lending and other high-margin activities. A financially successful retail customer base could perpetuate an extended period of active trading among retail investors.