After Predicting the Financial Growth of 2024, Here’s What 2 Economists See in 2025 – This Is What You Need to Do

The financial landscape is constantly shifting, and 2024 was no exception. Economists Brian Blank and Brandy Hadley accurately forecasted notable growth last year. But as we step into 2025, the big question remains: will the U.S. economy continue its upward trajectory, or are there hurdles on the horizon?

From Federal Reserve policies to global trade tensions and consumer behavior, we’ll delve into the most pressing factors shaping financial growth in 2025. Additionally, we’ll explore the latest updates on the child tax credit, offering vital information for American families living abroad.

The Financial Growth of 2024: Key Takeaways

2024 proved to be a year of resilience. Despite widespread predictions of an impending recession, the U.S. economy showcased remarkable strength. GDP growth outpaced expectations, and inflation gradually eased. Economists Blank and Hadley identified efficiency gains and moderating inflation as the primary drivers of this growth. But does 2025 hold the same promise?

Why Was 2024 a Success Story?

Several factors contributed to the robust financial growth:

• Federal Reserve Policies: Strategic interest rate adjustments played a significant role.
• Consumer Resilience: Despite inflationary pressures, consumer spending remained strong.
• Labor Market Stability: Low unemployment rates and steady wage growth supported household incomes.

Financial Growth of 2024, Here’s What 2 Economists See in 2025

1. New Year, New Challenges

As we move into 2025, the economy appears to be on solid footing. However, “soft landings”—where economic growth slows just enough to curb inflation without triggering a recession—are notoriously fragile. Economists warn that maintaining this balance will require careful navigation.

2. The Federal Reserve and Interest Rates

The Fed’s decision to cut interest rates in late 2024 marked a significant shift. However, Fed Chair Jerome Powell cautioned that the pace of future rate cuts would likely slow. With the terminal rate now at 3%, the highest since 2016, what does this mean for 2025?

Key Considerations for 2025:

• Will interest rates remain elevated?
• How will these rates impact borrowing costs and consumer spending?

Inflation and Economic Uncertainty

3. Tackling Sticky Inflation

While inflation has moderated, it remains above the Fed’s target of 2%. Economists predict that inflation will continue to pose challenges, particularly in light of rising geopolitical tensions and supply chain disruptions.

4. The GDP Outlook for 2025

Gross Domestic Product (GDP) is projected to grow at a slower pace in 2025, though it may still exceed long-term expectations. Economists expect GDP growth to hover around 2.5%, driven by resilient consumer spending and steady business investment.

Fiscal Policy: Risks and Opportunities

5. The Role of Tariffs

Potential tariff increases could disrupt trade and elevate inflation. For every 1% increase in tariff rates, economists estimate a 0.1% rise in annual inflation. However, these measures could also be leveraged as negotiating tools.

6. Tax Cuts and Their Implications

Tax cuts remain a focal point for policymakers. While they can stimulate economic growth, they also risk exacerbating budget deficits. Striking the right balance will be crucial.

Consumer Behavior and the Job Market

7. Labor Market Resilience

Despite slight upticks in unemployment, the labor market remains robust. Employers’ reluctance to lay off workers, known as labor hoarding, has helped maintain job stability.

8. Consumer Debt and Spending

While income growth has outpaced debt accumulation, rising consumer debt levels indicate financial stress for some households. Economists advise caution as we enter 2025.

Equities and Financial Markets

9. Stock Market Trends

The stock market’s performance in 2025 hinges on various factors, including corporate earnings, interest rates, and technological advancements. Artificial intelligence (AI) remains a bright spot, driving growth in tech-heavy indices like the NASDAQ.

10. Opportunities in Discounted Stocks

Investors should watch for underperforming or discounted stocks, which may rebound and present lucrative opportunities.

Confirmed – You Can Now Claim the Child Tax Credit If You Live Abroad – This Is What You Need to Do

11. What Is the Child Tax Credit?

The child tax credit provides financial relief to families with dependents. Recent updates allow U.S. citizens living abroad to claim this benefit.

12. Steps to Claim the Credit

Here’s how expats can claim the child tax credit:

1. Ensure your tax residency status aligns with IRS guidelines.
2. File Form 1040 and attach Schedule 8812.
3. Provide the required documentation, including proof of dependent eligibility.

The financial growth of 2024 set the stage for a promising yet uncertain 2025. With resilient consumer behavior, evolving fiscal policies, and emerging investment opportunities, the U.S. economy may continue its upward trajectory. However, challenges such as sticky inflation and trade tensions require vigilance. Meanwhile, families living abroad can now take advantage of the child tax credit, providing much-needed relief. As we navigate 2025, staying informed and adaptable will be key to seizing opportunities and mitigating risks.

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