As the global economic landscape shifts in response to the new U.S. administration's policies, investors are faced with challenges and significant opportunities. At a recent gathering of firm clients, Olga Bitel, global strategist at William Blair, highlighted key insights into navigating this new economic reality, emphasizing that she believes the greatest opportunities lie in jurisdictions, such as Europe and Japan, with the capacity, resources, and talent to respond effectively to shifts originating from the U.S. Below are highlights from her presentation in a Q&A format.

What's your current assessment of Europe?
Contrary to its historical image as economically sclerotic, Europe, particularly Germany, is undergoing transformative changes. German elections in late February were a catalyst for change, as the winning coalition has acted swiftly to amend the country’s constitution to commit between €500 billion to €800 billion toward infrastructure development, signaling a bold new era for Europe's largest economy. The EU Commission also announced a $100 billion joint EU defense fund and for debt to be issued against it, marking significant progress towards deeper financial markets for the euro. Growth in Europe is sequentially accelerating from anemic levels, while growth in the U.S. is sequentially decelerating, making Europe an increasingly attractive investment destination even in the near term.
Germany and other countries have increased their emphasis on defense spending of late. What are the broader implications?
The recent emphasis on defense spending across Europe and Japan is about more than traditional military infrastructure; it's a significant step toward innovation. Drawing parallels to America's historical investment in technology via defense, European and Japanese defense spending could become the foundation for the next wave of technological and commercial advancements.
What is the greatest opportunity and the greatest risk when it comes to the Trump administration's approach to tariffs?
While tariffs present a clear economic risk reminiscent of the protectionist errors of the 1930s, they simultaneously offer Europe a unique opportunity. According to the IMF, by dismantling internal trade and capital barriers, Europe could effectively achieve a 100% reduction in intra-EU tariffs, significantly outweighing any negative impact from external tariffs coming from the U.S. Economic interdependence, not protectionism, may be the smarter strategic approach for enduring peace and prosperity.
What's your perspective on cryptocurrency?
As sovereign control over currency remains critical to national power, I believe decentralized currencies like Bitcoin face a dead end. However, the underlying blockchain technology that is enabling crypto presents profound opportunities. The emergence of stablecoins, backed by tangible assets like U.S. treasuries, signals the real direction digital finance will take—grounded in sovereign currencies yet empowered by innovative technology.
How can America's housing problem be addressed?
America's housing market volatility, accelerated by the pandemic-driven demand surge, is stabilizing, but underlying affordability issues persist. Annual house price increases in the largest 20 cities in the U.S. are now trending around 5%, which is in line with the decade prior to the pandemic. While wages in the U.S. have been growing, they have lagged behind the price appreciation in the housing market, so it will likely take years for wage growth to catch up to permanently higher housing price levels. The current U.S. administration has moved decisively to remove some environmental protection agency permitting challenges and obstruction, but more impactful solutions will involve overcoming permitting barriers and incentivizing sustainable housing growth at the local level.