Tomorrow is the last day of 2025, so I thought it was a perfect time to assess the “expert” predictions from New Year’s Eve last year. I looked up a bunch of predictions at the time, and at the end of the year, only 6 of the 14 have been resolved positively. 8 of the predictions were worse that expected.

• ECONOMIC INDICATORS:
  • 🟢 +11.5% – S&P 500 Growth (7-14%)
  • 🟢 +2.5% – USA GDP Growth
  • 🔴 +2.4% – Inflation (CPI)
  • 🔴 < 4% – Unemployment Rate
  • 🟢 50bps – Two Fed Rate Cuts of 25bps
• POLITICAL CHANGES:
  • 🟢 Extension of TCJA / “Trump Tax Cuts”
  • 🟢 Increased SALT Deduction (from $10K to $20K)
  • 🟢 No Federal Tax on Social Security Income
  • 🔴 Higher Tariffs 20%: China, Mexico, Canada
  • 🔴 DOGE Target $500B in spending cuts in Year 1
• HEALTHCARE
  • 🔴 8% Medical Cost Inflation
  • 🔴 +7% Health Insurance Increase
  • 🔴 AI Analysis of almost all health profiles
  • 🟢 No significant changes to Medicare

The immediate economy looks like it’s been pretty strong. The S&P 500 is finishing at about +15% growth for the year – slightly above the 7-14% range of expected growth, and a full 450 basis points above the Wall Street analyst midpoint prediction. GDP also looks pretty good. I gave it a “green light”, even though we don’t have the Q4 numbers for another 90 days. Through Q3, it is on-track with +2.5% growth YTD and it’s gotten stronger each quarter. The Fed delivered what was expected with two 1/4 point interest rate reductions.

Unfortunately, most Americans say their personal finances continue to get worse in the latest Harvard-Harris Poll and we see worse than expected results income of these predictions.

Inflation is higher than expected and so is the unemployment rate. In addition, people say they are feeling the pinch from the Trump Tariffs which were enacted at higher than expected rates against China, Mexico, and Canada – the country’s 3 biggest trading partners. In addition, government efficiency efforts “DOGE” finished with a dud. Even their optimistic reporting of $214B in savings fell far short of expectations and overall government spending continued to balloon in the most recent federal budget reconciliation.

The Trump / GOP “One Big Beautiful Bill” did get passed with an extension of the earlier (temporary) TCJA tax cuts and the SALT Deduction was lifted from $10K to a higher than expected $40K. Those are perhaps good news for the longer term, but without keeping government spending in check, will likely lead to much more debt-induced inflation, which offsets their usefulness.

While there were no major changes to Medicare in the OBBB legislation, medical cost inflation / extension of ACA subsidies continue to be debated and led to the country’s longest ever government shutdown. Both medical costs and insurance costs rose at 2x the inflation rate in the meanwhile.

So overall the 2025 results are pretty mixed, compared with in-going expectations. I will note that personally, when all is added up, I don’t think this basket of 2025 financial outcomes has had any material impact on our lifestyle or financial position. You win on some, lose on others. I’m glad for the relative “boringness” that we are left with.

How much of an impact have the 2025 outcomes had on your life? What financial predictions would be good to assess for 2026?

Image: Pixabay