By D. Brian Blank and Brandy Hadley Heading into 2024 , we said the U.S. economy would likely continue growing, in spite of pundits’ forecast that a recession would strike. The past year showcased strong economic growth, moderating inflation and efficiency gains , leading most economists and the financial press to stop expecting a downturn. But what economists call “soft landings” — when an economy slows just enough to curb inflation, but not enough to cause a recession — are only soft until they aren’t . As we turn to 2025, we’re optimistic the economy will keep growing. But that’s not without some caveats. Here are the key questions and risks we’re watching as the U.S. rings in the new year. The Federal Reserve and interest rates Some people expected a downturn in 2022 — and again in 2023 and 2024 — due to the Federal Reserve’s hawkish interest-rate decisions. The Fed raised rates rapidly in 2022 and held them high throughout 2023 and much of 2024. But in the last four months of 2024, the Fed slashed rates three times — most recently on Dec. 18 . While the recent rate cuts mark a strategic shift, the pace of future cuts is expected to slow in 2024, as Fed Chair Jerome Powell suggested at the December meeting of the Federal Open Market Committee . Markets have expected this change of pace for some time, but some economists remain concerned about heightened risks of an economic slowdown . When Fed policymakers set short-term interest rates, they consider whether inflation and unemployment are too high or low, which affects whether they should stimulate the economy or pump the brakes. The interest rate that neither stimulates nor restricts economic activity, often referred to as R* or the neutral rate , is unknown , which makes the Fed’s job challenging . However, the terminal rate — which is where Fed policymakers expect rates will settle in for the long run — is now at 3% , which is the highest since 2016 . This has led futures markets to wonder if a hiking cycle may be coming into focus, while others ask if the era of low rates is over. Inflation and economic uncertainty This shift in the Federal Reserve’s approach underscores a key uncertainty for 2025: While some economists are concerned the recent uptick in unemployment may continue, others worry about sticky inflation. The Fed’s challenge will be striking the right balance — continuing to support economic activity while ensuring inflation, currently hovering around 2.4% , doesn’t reignite. We do anticipate that interest rates will stay elevated amid slowing inflation, which remains above the Fed’s 2% target rate. Still, we’re optimistic this high-rate environment won’t weigh too heavily on consumers and the economy. While gross domestic product growth for the third quarter was revised up to 3.1% and the fourth quarter is projected to grow similarly quickly , in 2025 it could finally show signs of slowing from its recent pace. However, we expect it to continue to exceed consensus forecasts of 2.2% and longer-run expectations of 2%. Fiscal policy, tariffs and tax cuts: risks or tailwinds? While inflation has declined from 9.1% in June 2022 to less than 3%, the Federal Reserve’s 2% target remains elusive. Amid this backdrop, several new risks loom on the horizon . Key among them are potential tariff increases , which could disrupt trade, push up the prices of goods and even strengthen the U.S. dollar . The average effective U.S. tariff rate is 2%, but even a fivefold increase to 10% could escalate trade tensions, create economic challenges and complicate inflation forecasts. Consider that, historically, every 1% increase in tariff rates has resulted in a 0.1% higher annual inflation rate , on average. Still, we hope tariffs serve as more of a negotiating tactic for the incoming administration than an actual policy proposal . Tariffs are just one of several proposals from the incoming Trump administration that present further uncertainty. Stricter immigration policies could create labor shortages and increase prices , while government spending cuts could weigh down economic growth. Tax cuts — a likely policy focus — may offset some risk and spur growth, especially if coupled with productivity-enhancing investments. However, tax cuts may also result in a growing budget deficit, which is another risk to the longer-term economic outlook. Count us as two financial economists hoping only certain inflation measures fall slower than expected, and everyone’s expectations for future inflation remain low. If so, the Federal Reserve should be able to look beyond short-term changes in inflation and focus on metrics that are more useful for predicting long-term inflation. Consumer behavior and the job market Labor markets have softened but remain resilient. Hiring rates are normalizing, while layoffs and unemployment — 4.2%, up from 3.7% at the start of 2024 — remain low despite edging up. The U.S. economy could remain resilient into 2025, with continued growth in real incomes bolstering purchasing power . This income growth has supported consumer sentiment and reduced inequality , since low-income households have seen the greatest benefits. However, elevated debt balances , given increased consumer spending , suggest some Americans are under financial stress even though income growth has outpaced increases in consumer debt. While a higher unemployment rate is a concern, this risk to date appears limited, potentially due to labor hoarding — which is when employers are afraid to let go of employees they no longer require due to the difficulty in hiring new workers. Higher unemployment is also an issue the Fed has the tools to address — if it must. This leaves us cautiously optimistic that resilient consumers will continue to retain jobs, supporting their growing purchasing power. Equities and financial markets The outlook for 2025 remains promising , with continued economic growth driven by resilient consumer spending , steadying labor markets, and less restrictive monetary policy. Yet current price targets for stocks are at historic highs for a post-rally period, which is surprising and may offer reasons for caution. Higher-for-longer interest rates could put pressure on corporate debt levels and rate-sensitive sectors , such as housing and utilities. Corporate earnings, however, remain strong, buoyed by cost savings and productivity gains . Stock performance may be subdued, but underperforming or discounted stocks could rebound, presenting opportunities for gains in 2025. Artificial intelligence provides a bright spot, leading to recent outperformance in the tech-heavy NASDAQ and related investments . And onshoring continues to provide growth opportunities for companies reshaping supply chains to meet domestic demand. To be fair, uncertainty persists , and economists know forecasting is for the weather . That’s why investors should always remain well-diversified . But with inflation closer to the Fed’s target and wages rising faster than inflation, we’re optimistic that continued economic growth will pave the way for a financially positive year ahead . Here’s hoping we get even more right about 2025 than we did this past year. D. Brian Blank is an associate professor of finance at Mississippi State University. Brandy Hadley is an associate professor of finance and distinguished scholar of applied investments at Appalachian State University. This article is republished from The Conversation under a Creative Commons license. Read the original article .Social media users are misrepresenting a Vermont Supreme Court ruling , claiming that it gives schools permission to vaccinate children even if their parents do not consent. The ruling addressed a lawsuit filed by Dario and Shujen Politella against Windham Southeast School District and state officials over the mistaken vaccination of their child against COVID-19 in 2021, when he was 6 years old. A lower court had dismissed the original complaint, as well as an amended version. An appeal to the U.S. Supreme Court was filed on Nov. 19. Javascript is required for you to be able to read premium content. Please enable it in your browser settings.
Wake Forest keeps trying new things early in the season, even if not all of the adjustments are by design. The Demon Deacons will try to stick to the script when Detroit Mercy visits for Saturday's game in Winston-Salem, N.C. The Demon Deacons (5-1) will be at home for the final time prior to three consecutive road games. Detroit Mercy (3-2) already has two more victories than all of last season. After a couple of narrow wins and a loss at Xavier, Wake Forest had a smoother time earlier this week in defeating visiting Western Carolina 82-69 on Tuesday night. Yet these are games when teams have to figure where contributions are going to come from in certain situations. The experimenting took a turn for Wake Forest in the Western Carolina game. Center Efton Reid III had limited minutes because of migraines, so there was a shift in responsibilities. Normal backcourt players Cameron Hildreth and Juke Harris logged time at the power forward slot. "That's just part of it," coach Steve Forbes said. "They did a good job adjusting. We ran a lot of stuff and there are several guys learning different positions. ... I give credit to those guys for doing the best job that they could do on the fly and adjusting to the play calls that we ran and the stuff that we changed." Wake Forest could excel if both Parker Friedrichsen and Davin Cosby can be consistent 3-point threats. Friedrichsen slumped with shooting in the first few games of the season and was replaced in the starting lineup by Cosby. In Tuesday's game, Friedrichsen drained four 3-pointers, while Cosby hit two. "It was really good to see Parker and Davin both make shots together," Forbes said. Not everything was solved for the Demon Deacons. Western Carolina collected 12 offensive rebounds, and that took some of the shine off Wake Forest's defensive efforts. "We can't be a good defensive team, or a really good defensive team, unless we rebound the ball," Forbes said. "It's demoralizing to your defense to get stops and then not get the ball." In Detroit Mercy's 70-59 win at Ball State on Wednesday, Orlando Lovejoy tallied 19 points, seven rebounds and five assists. "We got the ball to the shooters and playmakers," first-year Titans coach Mark Montgomery said. "You could tell by the guys' body language that we were going to get a road win. It had been a long time coming." On Saturday, the Titans will look for their second road victory since February 2023. The outcome at Ball State seemed significant to Montgomery. "We had to get over the hump," he said. "Our guys grinded it out." --Field Level MediaSocial media users are misrepresenting a Vermont Supreme Court ruling , claiming that it gives schools permission to vaccinate children even if their parents do not consent. The ruling addressed a lawsuit filed by Dario and Shujen Politella against Windham Southeast School District and state officials over the mistaken vaccination of their child against COVID-19 in 2021, when he was 6 years old. A lower court had dismissed the original complaint, as well as an amended version. An appeal to the U.S. Supreme Court was filed on Nov. 19. Javascript is required for you to be able to read premium content. Please enable it in your browser settings. Success! An email has been sent to with a link to confirm list signup. Error! There was an error processing your request. Get the latest need-to-know information delivered to your inbox as it happens. Our flagship newsletter. Get our front page stories each morning as well as the latest updates each afternoon during the week + more in-depth weekend editions on Saturdays & Sundays.
NoneKrispy Kreme Declares Quarterly Dividend
With nearly all of the votes counted, left-leaning Mr Milanovic won 49% while his main challenger Dragan Primorac, a candidate of the ruling conservative HDZ party, trailed far behind with 19%. Pre-election polls had predicted that the two would face off in the second round on January 12, as none of the eight presidential election contenders were projected to get more than 50% of the vote. Mr Milanovic thanked his supporters but warned that “this was just a first run”. “Let’s not be triumphant, let’s be realistic, firmly on the ground,” he said. “We must fight all over again. It’s not over till it’s over.” Mr Milanovic, the most popular politician in Croatia, has served as prime minister in the past. Populist in style, the 58-year-old has been a fierce critic of current Prime Minister Andrej Plenkovic and continuous sparring between the two has been a recent hallmark of Croatia’s political scene. Mr Plenkovic has sought to portray the vote as one about Croatia’s future in the EU and Nato. He has labelled Mr Milanovic “pro-Russian” and a threat to Croatia’s international standing. “The difference between him (Mr Primorac) and Milanovic is quite simple: Milanovic is leading us East, Primorac is leading us West,” he said. Though the presidency is largely ceremonial in Croatia, an elected president holds political authority and acts as the supreme commander of the military. Mr Milanovic has criticised the Nato and European Union support for Ukraine and has often insisted that Croatia should not take sides. He has said Croatia should stay away from global disputes, thought it is a member of both Nato and the EU. Mr Milanovic has also blocked Croatia’s participation in a Nato-led training mission for Ukraine, declaring that “no Croatian soldier will take part in somebody else’s war”. His main rival in the election, Mr Primorac, has stated that “Croatia’s place is in the West, not the East”. However, his bid for the presidency has been marred by a high-level corruption case that landed Croatia’s health minister in jail last month and which featured prominently in pre-election debates. Trailing a distant third in the pre-election polls is Marija Selak Raspudic, a conservative independent candidate. She has focused her election campaign on the economic troubles of ordinary citizens, corruption and issues such as population decline in the country of some 3.8 million. Sunday’s presidential election is Croatia’s third vote this year, following a snap parliamentary election in April and the European Parliament balloting in June.Budget 2025-26: CII calls for cut in excise duty on fuel, consumption vouchers to stir demand
Michigan fires offensive coordinator Kirk CampbellMajor stock indexes on Wall Street drifted to a mixed finish Friday, capping a rare bumpy week for the market. The S&P 500 ended essentially flat, down less than 0.1%, after wavering between tiny gains and losses most of the day. The benchmark index posted a loss for the week, its first after three straight weekly gains. The Dow Jones Industrial Average slipped 0.2%, while the Nasdaq composite rose 0.1%, ending just below the record high it set on Wednesday. There were more than twice as many decliners than gainers on the New York Stock Exchange. Gains in technology stocks helped temper losses in communication services, financials and other sectors of the market. Broadcom surged 24.4% for the biggest gain in the S&P 500 after the semiconductor company beat Wall Street’s profit targets and gave a glowing forecast, highlighting its artificial intelligence products. The company also raised its dividend. The company’s big gain helped cushion the market’s broader fall. Pricey stock values for technology companies like Broadcom give the sector more weight in pushing the market higher or lower. Artificial intelligence technology has been a focal point for the technology sector and the overall stock market over the last year. Tech companies, and Wall Street, expect demand for AI to continue driving growth for semiconductor and other technology companies. Some tech stocks were a drag on the market. Nvidia fell 2.2%, Meta Platforms dropped 1.7% and Google parent Alphabet slid 1.1%. Among the market’s other decliners were Airbnb, which fell 4.7% for the biggest loss in the S&P 500, and Charles Schwab, which closed 4% lower. Furniture and housewares company RH, formerly known as Restoration Hardware, surged 17% after raising its forecast for revenue growth for the year. All told, the S&P 500 lost 0.16 points to close at 6,051.09. The Dow dropped 86.06 points to 43,828.06. The Nasdaq rose 23.88 points to 19,926.72. Wall Street’s rally stalled this week amid mixed economic reports and ahead of the Federal Reserve’s last meeting of the year. The central bank will meet next week and is widely expected to cut interest rates for a third time since September. Expectations of a series of rate cuts has driven the S&P 500 to 57 all-time highs so far this year . The Fed has been lowering its benchmark interest rate following an aggressive rate hiking policy that was meant to tame inflation. It raised rates from near-zero in early 2022 to a two-decade high by the middle of 2023. Inflation eased under pressure from higher interest rates, nearly to the central bank’s 2% target. The economy, including consumer spending and employment, held strong despite the squeeze from inflation and high borrowing costs. A slowing job market, though, has helped push a long-awaited reversal of the Fed’s policy. Inflation rates have been warming up slightly over the last few months. A report on consumer prices this week showed an increase to 2.7% in November from 2.6% in October. The Fed’s preferred measure of inflation, the personal consumption expenditures index, will be released next week. Wall Street expects it to show a 2.5% rise in November, up from 2.3% in October. The economy, though, remains solid heading into 2025 as consumers continue spending and employment remains healthy, said Gregory Daco, chief economist at EY. “Still, the outlook is clouded by unusually high uncertainty surrounding regulatory, immigration, trade and tax policy,” he said. Treasury yields edged higher. The yield on the 10-year Treasury rose to 4.40% from 4.34% late Thursday. European markets slipped. Britain’s FTSE 100 fell 0.1%. Britain’s economy unexpectedly shrank by 0.1% month-on-month in October, following a 0.1% decline in September, according to data from the Office for National Statistics. Asian markets closed mostly lower.