Economic and Market Outlook for 2025 Highlights Uncertainty and Resilience

Analysts predict steady U.S. economic growth but warn of potential market headwinds and geopolitical risks.

The U.S. economy is projected to grow at 2.5% in 2025, slightly lower than 2024's estimated 2.8%, with continued strength in consumer and corporate spending.
Inflation is expected to remain above the Federal Reserve's 2% target, with 2025 projections at 2.4% for CPI and 2.3% for core PCE inflation.
Interest rates are likely to stay elevated, challenging traditional 60/40 investment portfolios and creating headwinds for small-cap stocks reliant on floating-rate debt.
Geopolitical uncertainties, including tensions in China/Taiwan, Russia/Ukraine, and the Middle East, pose potential risks to financial markets and global stability.
While U.S. stocks have shown strong momentum, analysts caution that historically high valuations and concentrated gains in top tech stocks could limit future returns.