CFS Viewpoint – Summer 2025 –

       Economists have predicted 10 out of the last 2 recessions.

                                   Sounds silly, doesn’t it?

It’s a long-running Wall Street joke. Year after year, forecasts predict economic disaster, and year after year, the U.S. economy keeps moving forward. In the past two decades, we’ve only had one significant recession in 2008–2009 and a sharp, brief COVID-related dip in early 2020. Most of the dire predictions simply never materialize.

And here in 2025, we’ve heard the same pessimism again—nonstop. Political commentators and media outlets have warned of a looming collapse, but the economy has once again proven stronger than expected. We’ve seen all the same headlines and projections you’ve seen—but unlike many investors, we have access to extensive research from many of the largest and most respected investment firms in the country. Most of them rejected the crash narrative, we agreed.

As one highly regarded economist put it (and we paraphrase): the U.S. economy is far more resilient, dynamic, and deeper than it gets credit for. We’ve said this for decades, and once again, it’s playing out—despite the political noise and 2025’s tariff fears.

Here’s what’s really been happening in the U.S. economy this year:

Inflation has eased in several key areas. Energy prices—oil, gas, diesel—are down, which lowers costs across nearly every sector.

Manufacturing is growing. More U.S. companies—and many foreign ones—are bringing production, research, and technology facilities back to the U.S. at a strong pace.

Infrastructure investment is booming. Across the country, roads, bridges, and utilities are being built and upgraded, driving job creation and local economic activity.

Technology companies are investing heavily. Dozens of global firms have committed hundreds of millions—and in some cases, billions—to new AI, computing, and logistics facilities, bringing hundreds of thousands of new jobs.

The stock market has rebounded. After a brief pullback in March and April, markets have surged in the past three months, defying gloomy headlines.

GDP growth has exceeded expectations. Despite forecasts of a slowdown, U.S. economic output has remained strong.

Hiring remains healthy. Major U.S. and global tech firms are expanding, and the June jobs report came in far better than predicted.

Given this backdrop, what do we see going forward?

There are four major trends we’re watching:

  • Energy costs remain modest. Lower prices reduce transportation and manufacturing costs, keeping inflation down. And since so many everyday products—from packaging to chemicals—are petroleum-based, falling oil prices help across the board.
  • Taxes are coming down. Congress passed tax cuts on July 4. Much like the tax cuts in late 2017, leading into 2018 & 2019 prior to COVID, this will spur hiring, wage growth, and capital investment across a wide range of industries
  • Regulatory burdens may ease. The cost of federal compliance—estimated at over a trillion dollars per year—has long weighed on businesses. We anticipate a rollback of outdated, ineffective regulations, which would reduce inflationary pressure and boost growth.
  • Interest rates, while down from their peak, remain high. We believe there’s room for further rate cuts, especially as inflation cools. Lower rates would help homebuyers, which in turn stimulates spending on appliances, furniture, and remodeling—an important part of the U.S. economy that’s been held back. High interest rates can actually be inflationary, and historically, low rates have supported low inflation.

So what about our investments? With lower energy costs, lower taxes, and fewer regulatory hurdles, we expect U.S. businesses to keep growing, hiring, and investing. The economic foundation looks stronger than most people think.

Internationally, we’ve seen European stock markets outperform the U.S. this year, with several hitting record highs. A weaker dollar has improved foreign stock values, and countries like Germany are rapidly expanding industrial capacity—particularly in defense—due to rising geopolitical concerns. This has fueled growth in European manufacturing, pharmaceuticals, autos, and banks. Our international exposure has helped portfolios this year, and we continue to see opportunity abroad.

Yes, the news remains filled with fear and conflict. But that’s been true almost every year. The names change; the story stays the same. Those who underestimate the strength of the U.S. economy—and the resilience of American consumers—have consistently missed out.

We’ve seen this again and again: in 2008, during COVID, and earlier this year. Investors who panic based on headlines often miss the rebound, which tends to come much faster than expected.

Now is a good time to revisit the four enemies of investing:

Timing the market;  It’s impossible to consistently guess the best time to get out of and then back into the market. Most people get it wrong, and short-term moves often backfire.

Fear;  Investors often project world problems onto the markets. But fear rarely leads to sound investment decisions.

Politics;  Wall Street cares about profits, not politics. Markets follow economic growth and corporate earnings—not politicians or headlines.

Political commentators;  It’s important to consider who you’re listening to. Media personalities aren’t responsible for your money—your advisor is. We see all the same news, but we also receive broader, deeper analysis from major investment firms whose long-term outlook is far more balanced and grounded.

Despite the noise, American businesses and consumers continue to thrive. That’s why our guidance has remained steady—and why so many of you have seen meaningful investment growth over the years.

We thank you for sticking with us.  And as always, give our office a call if you have any questions, concerns or would simply like to catch up! We can be reached at 860.623.0104.

All the best,

Brian, Arnie, Dan, JT and Tom

**As usual this commentary is based solely the opinions of Brian Cassidy, Arnie Magid, Daniel Kelly, JT Galloway and Tom Kanyok. Nothing in the above written material is endorsed by, or written by, or provided by Cambridge Investment Research, Inc., or by any other outside party or firm.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cassidy Financial Services, LLC. and Cambridge are not affiliated.