With all the uncertainty coming into to 2025 with new leadership in our government – the fact of the matter is – we don’t really know what to expect…
Or do we?
Even though it SEEMS that the US economy is heading into 2025 with a strong tailwind and global investors appear to feel optimistic – doesn’t always mean we can hang our hat on something good happening…
But this time – I think we can – and it’s not just me saying so because according to Goldman Sachs… the upcoming year will deliver steady economic growth.
That’s welcome news…
But what are they basing this on?
Well, let’s take a closer look…
So, how bright does the future look according to Goldman Sachs (GS)?
Well, they predict that the U.S. economy will grow by a whopping 2.5% in 2025.
Even though that’s a touch slower than 2024’s 2.8% – which benefited from a unique set of tailwinds – like falling interest rates, rising wages and easing inflation…
It’s still nothing to shake a stick at.
So, we should be pumped that the bank believes the economy will still have plenty of momentum going forward.
Here’s a few of the highlights from Goldman’s forecast:
- Inflation to Cool Further: The Federal Reserve’s preferred inflation gauge is expected to drop to 2.4% by the end of 2025 – just slightly above the central bank’s 2% target.
- Stable Interest Rates: With inflation largely under control – Goldman expects the Fed to keep its key interest rate in the 3.25% to 3.5% range. That level – while not ULTRA low – is good enough to support growth without overheating the economy.
This stable environment could foster a sense of predictability for investors, businesses and consumers – and predictability is so much better than uncertainty…
A welcome change after years of market and economic turbulence.
This outlook paints a rosy picture…
But it’s built on some important assumptions:
- Targeted Tariffs: The bank assumes that any new US tariffs will be focused on China and auto imports – avoiding broader, across-the-board kind of levies. This would limit their impact on global growth but could still push inflation slightly higher. Without additional tariffs – Goldman believes core inflation could fall in line with the Fed’s 2% target.
- Stable Labor Market: Goldman also bets on a steady American labor market – assuming no major disruptions from changes in immigration policy. A stable job market would keep wages steady, encourage consumer spending and maintain business confidence.
- Supportive Policy Environment: Potential tax cuts, increased government spending and lighter regulations could provide even more of a boost to business sentiment and investment.
Goldman’s projections suggest an environment where equities – particularly in sectors sensitive to interest rates and economic growth – could truly thrive.
Lower inflation and stable rates should benefit consumer discretionary, tech and industrial stocks – while fixed-income markets could find faith in the Fed’s steady hand.
But there IS a word of caution…
These forecasts rely on a delicate balancing act.
Unexpected geopolitical tensions, tariff escalations or policy missteps could throw a wrench into the rosy picture…
So, investors should be prepared for surprises while positioning portfolios to benefit from the predicted economic stability.
That said – 2025 looks set to be a year of steady progress…
With economic growth cooling slightly but remaining robust enough to support a healthy market environment.
While risks remain – Goldman Sachs’ outlook suggests a backdrop of manageable inflation, stable interest rates and policy-driven tailwinds.
For investors, the key will be balancing optimism with caution, navigating those waters and avoiding any whirlpools that may pop up in what could be a banner year for the global economy.
So, what’s your first move?
Buy? Sell? Hold?
Well, I’ll tell you who doesn’t have to figure it out – GorillaTrades members.
They know that we’ll steer them straight no matter how good or how bad the economy is – because our system is data-driven.
Meaning we don’t have to guess what to do – the numbers tell us what to do.
It’s one of the reasons that we’ve got such a solid reputation in our industry – because we don’t make recommendations on momentum or hype – and we’ve given our members the chance to make a lot of money.
That said, it’s a new year – and I think we can help you make more money than you thought was possible…
Which is why I’m urging you to become a member today. Now, we understand some people would rather go it alone – but realize this: you don’t have to.
We’re here to help…
And in 2025 – we’re looking to take our members to the mountain top.
But, as always, the choice is yours…
Either way, at least you understand that the big boys think 2025 will give us a lot to smile about – and that should give you a little confidence to tackle this year head on.
Until next time…
“The most reliable way to predict the future is to create it.” – Abraham Lincoln
