2025 Recession Watch: How to Proactively Strategize

The first few months of 2025 have produced mixed results for US equities.  Despite efforts to coax out the full economic potential of the U.S., domestic markets have lacked confidence.  Meanwhile, ‘safe haven’ assets such as Treasury Bonds and international stocks have broadly rallied.   

They say it’s been the worst start to a year since, well, 2022.   

With a ballooning Federal deficit and the potential for a more competitive overseas trade environment, recent moves seem a bit counter intuitive.   The prevailing fear is that prolonged trade negotiations could discourage domestic capital deployment, thus triggering a cascade of negative consequences.   

The concern that tariffs will trigger another wave of uncomfortable inflation, while possible, is overblown.  Especially considering the recent March 14 reading of CPI-U at 0.2% (2.43% annualized), a drop in energy prices and a modest decline in longer-term rates.   

It is reasonable for equity investors to experience a correction of –20% or more from highs once every four years on average. This happens when FUD (fear, uncertainty and doubt) dominates sentiment. 

International market valuations relative to US have been historically cheap with the S&P 500 coming off two back-to-back years of double-digit rallies.   It is easier to turn an ankle stepping off first-place podium.   

So, is that it?  Is the US no longer top contender?  The Atlanta Fed’s GDPNow model revised its annualized growth in the current quarter from +2.3% to –2.4%.  Keynesian free-trade fanatics are busy prostrating themselves on camera to abash any with a notion that tariffs could be a means to a positive end.   

All I can say is that it’s possible and they could be right.  I offer no guarantees but remind you that we’ve been down scarier roads than this one.  Yet here we are, living better than kings not so long ago.   

Not kings today.  Charles has it pretty good.  

I invite you to join Brent and I as we elaborate on this topic.   We discuss current markets, what we should be doing in response to these downturns and what you should be hearing from your advisor. 

 

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About Your Hosts

 

Ben Jones

Managing Director, National Wealth Management Group

www.nwmgadvisors.com 

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Brent Gargano, CFPⓇ

Founder & Advisor, Infinite Wealth Planning 

www.infinitewealthplanning.com

linkedin.com/in/brent-gargano-cfp®-2067b573

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Editor

 

Trevor Gargano

Email: [e-mail]

Linkedin: https://www.linkedin.com/in/trevor-gargano-727