🌍 Your 2025 Crystal Ball: AI Agents, Tariff Wars & Bitcoin Booms

Techonomy readers,

Happy new year to you all! 2025 is shaping up to be a year of bold moves and big headlines. From AI agents ready to do your chores to Bitcoin aiming for a jaw-dropping $200K, the future’s never been more unpredictable—or exciting.

Will AI agents really become mainstream? Will Trump’s tariff wars shake up global trade? Can India finally outpace Japan’s GDP? And are EVs ready to own the road? I’m breaking it all down for you, one forecast at a time.

But first, let’s see how 2024 fared. To understand this, I’ve broken down the US economy as a review of last year, so you know how strong it has been despite inflation and other issues.

Grab your coffee (or drink of choice since it’s New Years’ Eve) and let’s jump into what could make 2025 a year to remember.

Your stories today:

1. The U.S. economy surprised everyone in 2024

2. Predictions of major world issues in 2025

1. US economy surprises again in 2024 despite Fed and election drama

US economy growth outpaced other rich peers in 2024
IMF projects US will fare better than other G-7 countries in 2025

⏳ The deets in 30 seconds:

• The US economy outperformed G-7 peers, driven by strong consumer spending despite high interest rates and election uncertainty.

• Household spending grew 2.8%, supported by wage growth outpacing inflation and record household wealth.

• Inflation progress stalled at 2.8% (PCE price index), keeping Fed cautious with further rate cuts.

• Housing and manufacturing sectors struggled under high borrowing costs, with housing sales at their lowest pace since 1995.

• The Fed cut rates by one percentage point in 2024 but maintained a high-for-longer approach as inflation persists.

• Labor market showed cracks: higher unemployment, slower hiring, and fewer job openings.

💡 How it impacts you:

• Consumer resilience kept the economy afloat, but reliance on credit cards and loans is increasing for lower-income households.

• Mortgage rates near 7% make buying homes more expensive; expect price incentives but limited inventory.

• Higher borrowing costs are making loans and credit card payments pricier, with delinquency rates rising.

• Job security concerns grow as hiring slows and unemployment edges up, especially for less-skilled roles.

• Investments in housing and manufacturing sectors may remain sluggish due to high borrowing costs.

🔮 Industry prediction:

2025 might see the US economy walking a tightrope — solid spending but weak housing and manufacturing, as Trump’s trade and labor policies test the inflation and job market limits.

• Key Players:

  • 🎯 Leading: Large retailers (Walmart, Target), luxury brands.

  • ⚡ Following: Homebuilders, industrial manufacturers.

  • 👥 Worth Watching: Emerging automation firms, trade-dependent exporters.

• Timeline:

  • Early 2025: Policy adjustments, potential tariff announcements.

  • Mid 2025: Inflation signals and manufacturing trends under scrutiny.

  • Late 2025: Fed’s rate policy likely to shift based on inflation progress.

⚡ The bottom line:

American consumers carried the economy in 2024 like marathon runners hitting a second wind — fueled by wealth gains but drained by rising debt and slowing job growth.

2. Forecasting the world in 2025

(1) Will we have AI agents we can use?

Yes. “Agentic AI” is poised to be 2025’s buzzword as major players like Google, OpenAI, Microsoft, and Anthropic introduce AI “agents.” These tools will automate tasks like filling out forms, managing emails, and handling digital errands, becoming central to our online interactions. The winning platform may redefine how we navigate the digital world.

(2) Will Donald Trump start a full-scale tariff war?

Yes, but not guaranteed. Trump’s policies will likely impose at least 10% tariffs on half of U.S. imports, targeting China (15% of imports) and threatening Mexico and Canada (30%) over immigration concerns. Trading partners will resist, but Trump’s penchant for tariffs as revenue and leverage suggests they’ll persist through 2025.

(3) Will Chinese export prices fall further?

Yes. China’s export price index, already down 5.2% in 2024, may drop as much as 10% in 2025. This sharp decline will challenge competitors, counteract potential U.S. tariffs, and risk flooding global markets with cheap goods, particularly outside the U.S.

(4) Will U.S. interest rates end the year lower than now?

No. Despite market hopes for a 3.9% Fed funds rate, Trump’s economic policies—tax cuts, tariffs, and deportations—will stoke inflation. While Europe’s ECB and the Bank of England may ease rates, the Fed is likely to remain cautious, barring a stock market collapse.

(5) Will the Magnificent Seven take a fall?

No, but growth will slow. Companies like Alphabet, Amazon, and Tesla will maintain dominance due to AI hype and Silicon Valley’s dynamism. However, high capex, inflated AI expectations, and lofty valuations may drive investors toward smaller tech firms, capping growth.

(6) Will Elon Musk and Donald Trump fall out?

No. Trump’s deregulatory policies have boosted Musk’s net worth, benefiting Tesla, SpaceX, and Neuralink. Musk’s pragmatism will likely keep him aligned with Trump, at least until their shared vision for a “Department of Government Efficiency” concludes in 2026.

(7) Will Germany relax its debt brake?

Yes. As Germany faces defense spending needs and economic stagnation, the Schuldenbremse is under scrutiny. February’s elections may see CDU leader Friedrich Merz soften the debt brake in coalition negotiations, particularly with parties like the Greens or Social Democrats.

(8) Will Bitcoin hit $200,000?

Yes. Trump’s crypto-friendly administration and reduced SEC scrutiny will encourage institutional investment. This regulatory shift, coupled with Wall Street’s growing comfort with digital assets, is expected to drive Bitcoin to new heights.

(9) Will India’s GDP overtake Japan’s?

No. Although India’s economy is growing rapidly, surpassing Japan is more likely in 2026. A projected 4.7% gap remains for 2025, with current growth trends and currency factors suggesting India needs more time to close the gap.

(10) Will electric vehicles make up more than a quarter of global auto sales?

No. EV sales are expected to hit around 22% in 2025. Challenges include waning enthusiasm outside China and affordability issues. Despite dozens of new models and aggressive discounting, the U.S. market’s uncertain regulatory environment may slow adoption, while China continues leading the charge.

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