Image Source: AI Generated
I have spent the last few weeks, more specifically since Thanksgiving, mentally preparing myself for 2025. As, the end of 2024 has been an emotionally draining few months.
Like many others, I have read several large financial institutions’ annual market outlook and economic perspectives for the coming year. Several mentioned the perspective policy changes of the President-Elect, uncertainty about inflation, falling inflation, preparing for a soft-landing, a trade war because of tariffs, and the headscratcher of some arguing if immigration causes the unemployment rate to rise.
The fervor of many to focus on pro-growth deregulation policies, and the idea that the President-Elects presidency would be tamer than what he campaigned on as the base of their assertation is a delusion not based in the reality of what America is to come. It’s extremely frustrating that many think the President-Elect was just playing “politics”.
The US unemployment rate is 4.2 percent, black unemployment is 6.4 percent, while the total labor market unemployment spiked to 14.7 percent. You can read more about The Employment Situation from The Bureau of Labor Statistics.
It seems that many have already forgotten that the Boar’s Head disaster has shown the price of deregulation. That you cannot make anyone great without increasing their quality of education, and opportunities to apply that education while earning a fair wage. This simply cannot be done without The Department of Education.
Even in my metropolitan area, the local universities are still selling college degrees for employment opportunities that will not exist when the students graduate simply because of the rapid advancement or artificial intelligence. This advancement will now move more rapidly than the advancement of computers and technology because of deregulation and Elon Musk.
There is so much uncertainty in 2025, its chaos. It is simply too uncertain to be logical. It is an irrational exuberance, which will lead to an unprecedented complex liquidity landscape. Market oscillations, policy mandates, and technological proliferations will fundamentally alter the parameters of capital optimization. Empirical observations demonstrate that conventional liquidity frameworks will prove insufficient amid coming market dynamics.
Market Makers will increase their fees as demand for liquidity increases, and the private equity and venture capital secondary market will demand higher transactional volume as limited partners will seek to reduce their exposure by relinquishing their commitments.
Market projections for 2025 demand sophisticated liquidity preparedness protocols amid heightened complexity. Probabilistic analysis delineates dual liquidity risk vectors: market liquidity risk and funding liquidity risk. Empirical evidence demonstrates the necessity of comprehensive risk assessment protocols encompassing both dimensions.
This is for educational purposes only. This is simply my own predictive analysis.
Happy New Year!
Dr. Farris