While the U.S. economy showing positive signs, analysts are hesitant to draw conclusive claims, as government policy and political relationships are increasingly volatile. According to BGO’s first quarter 2025 U.S. Economic Outlook, analysis and critical thinking are key components in the coming year.
Despite an easing inflation rate since 2022, it is still far from its target rate of 2 percent. The outlook predicts inflation to continue slowing in the coming year. Last year’s interest rate cuts last year were rash, according to BGO. Because of this, the year has seen a difficult easing cycle, as measured by the difference between the 10-year Treasury yield and the Fed funds rate. Rates are expected to fall across the yield curve but not by large margins.
The labor market has seen job growth, as companies hire more selectively amidst the labor shortage. The unemployment rate is near full employment, resulting in health wage growth, well in excess of inflation and r
