Introduction
In an exclusive interview, Jason Trennert, Chairman and CEO of Strategas, shares his insights on the economic landscape as we look towards 2025. While the specter of recession seems to have retreated, questions loom over Bitcoin’s performance and the potential for inflation to resurface.
The Economic Outlook
Trennert emphasizes that the likelihood of a recession in 2025 is minimal, attributing this to tight labor markets, strong corporate profits, and favorable credit conditions. He posits that the exceptional market growth of 2023 sets a high bar for the following year, predicting more modest returns in line with projected profit increases of 9%.
Inflationary Concerns
Despite a generally positive economic forecast, Trennert expresses concern over the potential for a second wave of inflation, which historically has a 90% chance of occurring after the first wave. He notes that wage demands from workers, reflecting a deterioration in their standard of living, may contribute to inflation pressures, alongside significant national deficits.
Bitcoin’s Trajectory
The conversation transitions to Bitcoin, which has seen remarkable gains since the recent elections. Trennert attributes this surge to the reduction of regulatory risks and increased accessibility for new investors. However, he cautions that while Bitcoin may see continued interest, its price appreciation may not sustain the rapid pace of the previous year. He suggests that as the U.S. dollar strengthens, demand for alternative currencies like Bitcoin could decrease.
Gold Versus Bitcoin
In a comparison between traditional gold and the relatively younger Bitcoin, Trennert argues that gold’s historical reliability in guarding against inflation gives it an edge. He suggests that while Bitcoin has its merits, its relatively short history makes it a more speculative investment in contrast to gold’s established reputation.
Key Takeaways
- The risk of recession in 2025 is low, supported by strong economic fundamentals.
- Concerns remain regarding a possible second wave of inflation.
- Bitcoin’s growth may slow as regulatory risks diminish but the strengthening dollar could limit its appeal.
- Gold remains a more trusted hedge against inflation compared to Bitcoin.
