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I’m a Financial Advisor, Certified Financial Planner and co-owner with Generation Wealth [ [link removed] ] and every year I write a new year and mid year outlook for my clients but will include them in my Substacks as well. Here’s my new year poli-economic outlook from January here [ [link removed] ].
By Dustin Granger, CFP® Published July 2025
As we cross the midpoint of 2025, it's time to revisit and reexamine the themes and predictions I laid out in January [ [link removed] ]. Back then, I saw reasons for optimism: declining inflation, strong consumer spending, and early returns from federal investments like the Inflation Reduction Act. Much of that held true through the first half of the year. But storm clouds are now gathering—both figuratively and literally.
Tariffs, immigration restrictions, geopolitical instability, and shifting federal priorities are no longer distant threats. They’re now materializing and starting to weigh on markets, labor, and long-term confidence. Below, I revisit my original outlook with updated commentary, tracking where we’ve been right, where things have changed, and what clients should be watching next.
Tailwinds Driving Optimism – Still Present, But Showing Strain
1. Economic Momentum In January, I noted the strength of labor markets and cooling inflation. While the economy has stayed resilient, cracks are appearing. Job losses are rising in some sectors. Inflation has stalled in its downward trend. The U.S. dollar is slipping. We're still afloat, but the signals are shifting.
2. Federal Investments The early momentum of the Inflation Reduction Act has slowed. Some clean energy investments have been walked back, and rural broadband expansion has been halted. These pullbacks create uncertainty about whether these investments will deliver long-term returns or stall prematurely.
3. AI-Driven Productivity This has been the clearest bright spot. AI continues to prop up tech and related markets. It’s one of the reasons the stock market has stayed high, even as risks grow elsewhere. But productivity gains can’t paper over instability forever—especially if they come with layoffs.
4. Interest Rate Environment Back in January, I wrote that tariffs and immigration policy would likely delay rate cuts. That’s exactly what’s happening. The Fed’s hands are tied by inflation concerns—driven in part by tariffs—even though the economy may already be weakening. Rate cuts are arguably needed now, but policy has become reactionary, not proactive.
New Tailwind (Short-Term): Corporate Tax Cuts The BBB tax deal has delivered short-term earnings boosts for corporations. Markets like it—for now. But the long-term risks to income inequality and economic stability are very real.
Risks on the Horizon – Now Coming Into View
1. Geopolitical Uncertainty These risks have worsened: Israel, Iran, Russia, and Ukraine are all escalating. Global instability may soon reach a tipping point that forces increased defense spending and investor caution.
2. Tariffs and Immigration Policy The chilling effect on immigration is growing. Massive ICE budget increases and scare tactics have discouraged labor participation from essential low-wage immigrant workers. Disaster recovery, agriculture, and construction are vulnerable—especially during hurricane season. Markets are still giving the administration the benefit of the doubt with Trump’s tariff wars— assuming that he won’t follow through fully on the most disruptive tariff threats. But that optimism has an expiration date if policies escalate.
3. Cryptocurrency Volatility Crypto is in the spotlight for new reasons. Congress is advancing more favorable regulations, giving digital assets a stronger foothold in the financial system. But these moves come with growing concerns—from risks of increased speculation and systemic instability to the potential for cryptocurrencies to be misused at larger scales. While regulation could provide legitimacy, it also opens new doors for unintended consequences.
4. Corporate Tax Cuts and Income Inequality The BBB tax package is turning out worse than expected. Yes, it preserves some positive items like lower taxes on lower income citizens and adds tax relief with senior bonus deductions, but it’s widely considered the largest wealth transfer to the rich in U.S. history. Cuts to SNAP and Medicaid are already leading to rural hospital closures, and greater instability may emerge after 2026, and beyond, when most of these cuts take effect.
5. Climate Change Risks Insurance crises continue. But now, federal cuts to FEMA and NOAA may create disasters without warning. Southern states are especially exposed—both to physical storms and the financial fallout from inadequate recovery infrastructure.
6. National Debt in Context The debt narrative has been hijacked to justify deep cuts to essential programs, undermining investments in education, health, and infrastructure—while tax breaks for corporations and the wealthy widen inequality. The long-term damage could be severe.
Strategic Considerations – Updated Guidance
1. Balanced Portfolios Now is a good time to raise some cash in portfolios. This serves two purposes: it cushions against near-term volatility and provides dry powder to take advantage of opportunities if markets pull back. While equities—especially in AI and infrastructure—remain important, it’s wise to pare back exposure with markets near highs. Bonds continue to be attractive in this mid-to-high interest rate environment, offering a more stable way to generate income. Additionally, gold and precious metals deserve a closer look. They’re well-positioned as a hedge against rising uncertainty, potential inflation, and a weakening dollar.
2. Adaptability in 2025 Although the stock market still looks resilient, warning signs are flashing everywhere: political instability, layoffs, interest rate gridlock, and asset bubbles. It could keep driving upward, especially if the Fed cuts rates but adaptability and defensive positioning will matter more in the second half of the year.
3. Long-Term Planning Federal disinvestment in FEMA, NOAA, Medicaid, and broadband makes long-term planning more critical than ever. As AI continues to reshape the labor market, social safety nets and personal planning are the only buffers. Clients should also reassess insurance coverage, geographic risk, and long-term financial goals to ensure they remain secure in an increasingly volatile environment.
Conclusion: Prepare for More Turbulence
We’ve made it through the first half of 2025—but just barely. Tariffs, layoffs, immigration crackdowns, and a growing wealth divide are destabilizing foundations we once relied on. Political whiplash is a daily event. My radar is lighting up with red flags. While I won’t say a recession is guaranteed, it’s becoming increasingly probable. We may already be in one, masked by AI stock gains and short-term boosts from tax cuts.
Corporations are thriving in the short term—but the economy comes for everyone in the long term. We can’t run from reality forever. This is why I recommend raising some cash to cushion volatility and stay ready for opportunities, rebalancing portfolios toward bonds and defensive positions, and increasing exposure to gold and precious metals as a hedge against uncertainty, inflation, and a weakening dollar.
The best move right now? Protect your portfolio, prepare for turbulence, and stay flexible. Markets move in cycles—and opportunities always emerge for those ready to act.
Written by Dustin Granger, CFP® – July 2025
Important Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risks, including the possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Diversification does not protect against market risk. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

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