It was never a dull moment with President Donald Trump at the helm. From 2 a.m. Truth Social posts to Friday night executive orders, there was always something to report, especially for those involved in the business and economic world. Of course, the major headline of 2025 was tariffs, but there was so much more. Let’s hop into the time machine and explore the past year.
Tariffs Top Economic Stories of 2025
When President Trump secured the 2024 election, the whole world knew that tariffs were coming. However, it is safe to say that many observers were unaware that Trump would go scorched earth on the global economy, imposing massive sanctions on major US trading partners.
Indeed, the president’s April 2 Liberation Day will be one for the history books. No one can ever forget when the president walked in front of a crowd of policymakers, blue-collar workers, and the media and unveiled a chart listing all of the reciprocal tariff rates on various countries, be it Heard and McDonald Islands or war-ravaged Syria.
But the most consequential development from that announcement was the market selloff. Comparable to the onset of the coronavirus pandemic, an ocean of red ink washed over Wall Street, leading to tremendous buying opportunities for retail and institutional traders. That is, if anyone paid attention to Truth Social and heeded Trump’s advice not to be a “panican.”
In the end, the world did not burn. The economy did not slip into a recession. Biden-era inflation was not realized. Yes, there was a frenzy across shipping routes, but trade has stabilized. In fact, Wall Street is at record highs, with the bulls devouring the bears, which is a perfect segway.
Bulls Talking Markets on CNBC
Who didn’t make money in the financial markets this past year? From the Magnificent Seven shareholders to the goldbugs to passive index fund investors, if you had stocks or assets, you generally generated a handsome profit despite the springtime selloff. Even if you were holding Treasury securities, the appealing 4% yield helped you outpace inflation!
Still, there were some losers, mainly the US dollar, crude oil, and bitcoin. These assets tanked in 2025. The greenback cratered by about 10% due to tariffs. Oil prices fell 20% due to surging output. Bitcoin declined by about 5%, even after reaching an all-time high of $126,273.
The only thing that can stop the momentum is if artificial intelligence is truly in a bubble and everyone relives the dot-com crash from 25 years ago.
Touring the Eccles Building
Uh, Federal Reserve, what are you doing? In the first eight months of 2025, the US central bank left interest rates unchanged out of caution, worried that the institution’s dual mandate – maximum employment and price stability – was under simultaneous threat. Tariffs were the main reason for the pause in the Fed’s rate-cutting cycle, with policymakers waiting to determine if levies would lead to higher inflation.
Fed Chair Jerome Powell restarted the Fed’s easing cycle, cutting interest rates three times in September, October, and December by a combined 75 basis points. Heading into 2026, the new target range for the benchmark federal funds rate is 3.5% and 3.75%.
But while the Fed expects lower inflation, stronger economic growth, and 4.4% unemployment, the monetary authorities only anticipate a single rate reduction in the year ahead. With the president planning to oust the central bank chief and potentially overhaul the century-old entity, perhaps more rate cuts will happen.
Affordability
Affordability has been the dominant theme in the second half of 2025. For some reason, Democratic lawmakers and the mainstream media forgot about the 22% inflation that occurred under the previous administration. They are now trying to blame President Trump for persistently high prices and the so-called affordability crisis.
Is there really an affordability crisis under the incumbent? Based on various metrics, it is safe to say that current economic conditions have stabilized. For example, in the first ten months of Trump’s term (October data were absent due to the shutdown), inflation has risen by 1.9%. By comparison, the country experienced 6% inflation in the first year of former President Joe Biden’s presidency.
Gas prices are firmly below $3 a gallon. Oil prices are hovering around $56 per barrel. Cost pressures in tariff-sensitive goods, whether apparel or new vehicles, have been minimal. The average 30-year fixed-rate mortgage has fallen about 80 basis points since Trump began his second term in the White House, to about 6.2%. Core inflation, which omits volatile energy and food prices, is at the lowest level since March 2021.
While consumers have largely disapproved of the president’s handling of inflation, according to the Liberty Nation News Public Square polling tool, the statistics suggest things are looking up. The administration expects Main Street to be victorious in the year ahead, as tax cuts, refunds, and real (inflation-adjusted) wage growth will be felt by voters heading into the midterm elections.
AI Everything
Everywhere you look, there is something related to artificial intelligence. A little bit of AI there. A little bit of AI here. The public is being inundated with this emerging technology: Elon Musk’s Grok, Microsoft’s Co-Pilot, Google’s Gemini, OpenAI’s ChatGPT, and more.
Will these free tools be enough to justify the trillions of dollars being invested into data centers, robotics, software, and other components of the industry? It remains to be seen whether consumers have the appetite to spend hard-earned dollars on AI, or if small businesses plan to invest in AI.
There has been some consternation regarding the tech, which is justified. Despite the reluctance to accept AI into our lives, it is remarkable how much it has advanced since the days of AI generating videos of Will Smith eating spaghetti. OpenAI’s Sora 2 is out of this world! Remember, AI is still transitioning from baby to toddler, so 2026 should be another fantastic year for the tech.
Never a Dull Moment
With President Trump in town, it is never a dull moment. Be it policy or posts, the real estate billionaire mogul has given the United States and the world a year to remember. But while it was a lot of fun, it was also filled with monumental changes.
