M&A Expected to Accelerate

U.S. mergers and acquisitions are expected to see momentum over the next 12 months. The first half of 2025 brought mixed results as deal activity slowed by around 8% since May, but total deal spending is still close to 40%. However, 15 of 21 sectors saw deal declines compared to last year, meaning the bar for a rebound is low.

The key behind a stronger M&A outlook is the changing regulatory landscape. With the Trump administration reviewing bank regulations and the Senate approving Michelle Bowman as the Fed’s Vice‑Chair for Supervision, who is a known advocate of deregulation, expectations are rising for eased constraints on financial deals. Bowman is expected to make approvals easier and revise capital buffers that previously slowed transactions in the $29 trillion Treasuries market. Capital One’s $35.5 billion acquisition of Discover signaled a start in the slowed banking M&A space.

The decrease in first-quarter deal volume has left many firms sitting on uncertainties and waiting for further policy clarity. Now, with momentum shifting toward regulatory easing and more predictable merger paths, many expect an increase in deals in the second half of the year. Particularly across midsize banks and financially stressed private firms seeking consolidation or liquidity.

U.S M&A is entering a favorable setup as deal volume is off a slow quarter, regulations are changing, and many players are incentivized. If economic conditions stabilize and the Fed implements key deregulation, we could see an uptick in dealmaking by late 2025 and into 2026.