08 May Just the Facts, Ma’am: A Fiduciary’s Take on the U.S. Economy in 2025
Everywhere you look, the media is drumming up fear of an imminent U.S. recession. But I’ve been studying the economy since the stagflation days of the 1970s—and here’s what I know: 📌 Most indicators do not support a downturn… yet the panic persists.
Let me say it plainly: I don’t see a U.S. recession knocking on our doorstep anytime soon. That may not be the popular view if you’ve been doom-scrolling financial headlines or listening to the constant drumbeat of political narratives. But as someone who’s been studying the American economy since the stagflation era of the 1970s—and managing portfolios across booms, busts, and bubbles—I’ve learned to trust the data more than the decibels. Yes, there are clouds on the horizon. But we are not in a storm.
Since January 2025, the news cycle has been flooded with headlines about an impending recession, stoked by tariff announcements from the new Trump Administration. Let’s be clear: those tariffs haven’t fully taken effect, and the most significant ones are still in the negotiation stage with key trade partners. Whatever their eventual impact, it is too early—far too early—to forecast damage with any absolute precision. What we do know is this: the U.S. economy is still expanding. First-quarter 2025 GDP grew at 2.1%. The unemployment rate is below 4%. Core inflation is down to manageable levels. These are not recession numbers.
The market selloff around “Liberation Day” (April 2, 2025) wasn’t about economic fundamentals but bad bets and forced liquidations. Hedge funds and CTAs levered into speculative trades got caught when the tide turned. The resulting margin calls were a mechanical unraveling, not a signal of systemic distress. Look past the noise, and you’ll see a surprisingly strong earnings season. Corporate America, while cautious on forward guidance, continues to deliver. Management teams are hedging their language, not because the sky is falling, but because they, too, are waiting to see how this tariff chess game plays out.
Mortgage rates remain high, in the 6.75% to 7.25% range, making it challenging for first-time home buyers. But guess what? That hasn’t collapsed the housing market. Building permits have even ticked up. Housing starts are soft, yes, but not cratering. There’s still a structural supply shortage in U.S. housing, which will continue supporting demand over time. Meanwhile, the Fed has kept rates steady at 5.25%. That’s not exactly a tight grip on the neck of the economy, especially when inflation is trending lower. We could see a rate cut later this year if the data supports it. In other words, the Fed is cautious, not panicked.
Investor sentiment—whether retail or institutional—can turn on a dime. We’ve seen it before. Remember 2011? 2018? The pandemic lows of 2020? Short-term sentiment can often be a contrarian indicator. But as fiduciaries, we are not paid to chase sentiment. We’re paid to steward capital with discipline, insight, and foresight. That means focusing on cash flows, fundamentals, risk management, and long-term opportunities—not reacting to every media cycle.
You are investing for generations, not news cycles. Right now is not the time to retreat. It’s time to reassess your exposure, look for panic-created mispricing, and ensure liquidity without compromising long-term returns. We live in a data-dependent, politically charged environment, but data still matters. Economic fundamentals still matter. Staying the course is not a cliché—it’s a strategy.
Closing Call to Action: Let’s cut through the noise together. If you’re a fiduciary stewarding capital across generations, now is the time for clarity, not fear.
Ram Kolluri is the founder and Chief Investment Officer of Exponential Wealth Management, LLC. He has managed client portfolios through every economic cycle since the early 1980s and serves high-net-worth families, foundations, and retirement plan sponsors across the U.S.
