Lower rates will underpin asset and covered bond performance, but a long period of very stable macroeconomic forecasts might come to an end as new leaders in the U.S., the EU, and Germany could take decisions early next year on tariffs, defense, and general spending that could reshape the economic outlook. In our base-case scenario, eurozone GDP will grow 1.2% in 2025, with Germany's GDP growth falling short of eurozone peers', while Spain will continue to outperform. We expect inflation to fall to 2.1% and the European Central Bank (ECB) to cut rates to 2.5% before midyear. Benchmark European covered bond issuance ebbed slightly in 2024 but remained close to recent highs. The drivers of new supply look slightly weaker in 2025, as scheduled covered bond redemptions remain flat and bank deposits bounce back while lending remains lackluster. We therefore expect European benchmark covered bond issuance of about €140 billion.