Are We Making Money or Losing Money in 2025?
381: Tariffs, Global Markets, and the Fiscal Reckoning
Good morning lords and young savages across the world — today we’re going to review the state of play in global financial markets. For finance and market buffs, you’ll love today’s edition as we are going to cover everything from crypto to bonds to equities to tariffs and more. The goal is to come up with the most accurate picture we can on what might happen in 2025 as the Trump Administration gets into the swing of things.
Are we going to make or lose money in 2025?
For those of you interested I dropped Risk On Episode 23 yesterday with
a top headhunter with over 700 placements in tech, finance, and other sectors. Him and I discuss the labour market, job hunting, what headhunters look for in successful candidates, and typical mistakes people make when applying for jobs. Check it out on Spotify (or above).If you missed Tuesday’s post on Escaping the Herd — it covers:
How mainstream narratives keep people distracted and misinformed
Why risk on assets remain the best path to real wealth (outside a business)
The corporate world’s illusion of security and how to break free
The Ukraine-Russia debate and why endless funding makes no sense
How media manipulation fuels division and blinds people to reality
The rise of NPC behavior and why most people will stay average
The loss of meaning, purpose, and humanity in modern society
Let’s start with with an overview, then we will move into asset classes, and finish with specific plays I am contemplating or looking at.
The 2025 Market Landscape
Depending on you talk to — we are either on the verge of a sustained bull run that will carry us much higher or we are on the precipice of financial disaster, potentially even a recession.
With the incoming Trump Administration kicking off foreign policy with a slew of tariffs, markets are seeing heightened volatility. Let’s look at some very basic summaries of data points that support both outcomes in 2025.
The Bear Case
Rising Credit Card Delinquencies/Consumer behavior: The percentage of credit card debt in serious delinquency (90+ days overdue) has jumped to 11%, signaling increasing financial strain on consumers and potential weakness in consumer spending. People are out there being reckless as all hell
Escalating Trade Tensions & Tariff Fear: New tariffs on imports from major trade partners like Canada, China, and Mexico have triggered retaliatory measures, disrupting supply chains and raising costs for businesses and consumers. If this continues or worsens we could be hampered throughout the middle of the year.
Fed Policy Uncertainty and Stubborn Inflation: Despite expectations of rate cuts in 2025, persistent inflation (which many say is quickly becoming stagflation) has made the Federal Reserve more cautious, with officials signaling fewer or delayed cuts. If inflation remains sticky, the Fed may keep rates higher for longer, which could pressure equities by increasing borrowing costs, consequently slowing economic growth, and reducing corporate profit margins (on the hiring front it’s slow and layoffs are picking up, even at large companies like META and Goldman Sachs). Markets have already started adjusting expectations, raising concerns about tighter financial conditions in the immediate future.
Layoffs — I don’t want to go down this rabbit hole in today’s post, but layoffs are accelerating. Goldman Sachs, META, semiconductor companies, and many others are trimming the fat. If you believe we can rely on the official data we can monitor this as the year goes on, but something tells me this trend is only going to accelerate
The Bull Case
Steady Economic Growth: Pro-business policies, deregulation, and rising productivity are expected to drive U.S. GDP growth around 2.5% this year, creating a stable backdrop for corporate earnings and market expansion
Resilient Consumer Spending: Despite higher interest rates, consumer demand remains strong (keeping in mind the CC data), keeping the economy afloat and supporting sectors like retail, travel, and technology — I actually don’t even know how people that aren’t in the top 25% are making it these days but maybe I am missing something. Credit cards only take you so far
Corporate Earnings Strength: Many companies continued to report better-than-expected earnings, demonstrating strong cost management and adaptability. If this trend continues, it could sustain market valuations and investor confidence in the markets
AI, Tech, Crypto: These high growth and high attention sectors have quite a bit of momentum, I could see a scenario where they continue to explode in the Trump Administration and drag us much higher than people think is possible. Of course we need global liquidity to pump our risk on bags — tariffs, bond markets, and fiscal policy will be highly determinant in how this shakes out in 2025
Bottom line
The U.S. economy is expected to grow around 2.5% in 2025, but stagflation concerns persist due to sticky inflation, rising consumer debt, and uneven growth. While corporate earnings and government spending may keep GDP afloat, higher borrowing costs and stagnant real wages could strain consumers, making the economy feel sluggish despite positive headline numbers.
If inflation remains above the Fed’s target and interest rates stay elevated, credit conditions could tighten, slowing growth later in the year. The market will be watching inflation, Fed policy, and consumer resilience to gauge whether stagflation risks become a reality in 2025.
For those of you who skipped college econ — stagflation is the good ole combination of slow economic growth, high unemployment, and a high rate of inflation. Hide yo kids hide yo wife because they starting to fire errybody out here, inflation is high, and economic growth is looking shakey.
People are beginning to forms theories online that Trump is playing some sort of 4D chess game. There’s growing speculation that Trump’s recent tariffs are part of a broader strategic move rather than just a trade policy shift. Some believe the tariffs could intentionally slow economic growth and push inflation higher, creating conditions that would pressure and prompt the Federal Reserve to cut interest rates—a move that could ultimately stimulate markets.
Others suggest the tariffs are a negotiating tactic designed to force trading partners into making concessions that benefit U.S. industries and address historical trade imbalances. However, some critics online are warning that this approach could escalate trade tensions, drive up consumer prices, and invite retaliation from key trade partners (already happening), potentially destabilizing the global economy.
Not sure what to think for now or if Donny is that clever — but one thing’s for sure, it’s been a volatile start to 2025 and the party is likely just getting started. There is the nagging question of the US Federal Reserve’s monke on it’s back — will the fiscal sins we committed in the Covid era eventually catch up with us.
Equities
This week, global equity markets saw heightened volatility as trade tensions and economic uncertainty weighed on sentiment. Major indices, including the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite, all posted losses, erasing recent gains as concerns over new tariffs and slowing economic growth took center stage. The implementation of U.S. tariffs on imports from Canada, Mexico, and China fueled fears of a trade war, adding to market instability and causing panic in risk on assets.
Several individual stocks saw major moves this week. CrowdStrike Holdings was among the biggest losers, plunging about 15.3% after issuing lower-than-expected guidance and warning of rising costs. On the flip side, General Motors (+7.1%), Ford Motor (+6.4%), and Stellantis (+5.8%) gained ground as shifts in tariff policies on Canada and Mexico signaled some potential relief for the auto industry.
The European Central Bank cut interest rates by 25 basis points to counter economic weakness, signaling a shift toward more accommodative policy. At the same time, Germany has loosened fiscal constraints to fund major infrastructure projects and ramp up defense spending, marking a significant policy shift. Most of Europe seems set, at least verbally, to begin moves towards bolstering regional defense in the wake of US language surrounding the ongoing Ukraine War. Could be a decent time to look at some European Defense plays.
Meanwhile, energy security remains a challenge, with the European Commission delaying plans to fully phase out Russian energy imports, reflecting the difficulties of balancing supply stability with their geopolitical goals. Adding to concerns, natural gas prices surged nearly 7% amid ongoing uncertainty over Ukraine which is now inflamed given the White House show that transpired earlier this week.
Couple market headlines to be weary of:
Oil prices fell to their lowest level since May 2023 this week as the market prices-in increased recession risk and OPEC+ supply (Kobeissi Letter)
The U.S. Dollar Index $DXY fell below its 200 Day moving average for the first time since November yesterday (Barchart) This is a good one to watch for the potential resurgence of risk on assets and maybe even Bitcoin
China says it is ready for 'any type of war' with US (BBC)
SPY put volumes spiked Tuesday to the 3rd highest level in history (Subu Trade on X) QQQ put volume made a new all-time high Tuesday
Norway’s $1.8 trillion sovereign wealth fund has made its first investment in an external hedge fund utilizing a long-short equity strategy
Bridgewater’s Ray Dalio said in a recent conversation with Fox Business that he thinks the U.S. is "quite near that point" of a debt death spiral. Without action, he says the US could see a "heart attack" occur in "three years, give or take a year, something like that."
Michael J. Kramer on X pointed out this week that the S&P 500 would have to fall about 30% to return to its historical median PE of 15.2, dating all the way back to 1985
Another update worth keeping an eye on — particularly if you have exposure to Chinese equities or crypto.
China is aggressively expanding its money supply, marking its first major monetary easing in 14 years, as it faces domestic economic struggles and potential trade conflicts with the U.S. under Trump. In January 2025, M2 money supply surged to 318.46 trillion yuan ($43.6 trillion), up from 313.61 trillion yuan ($42.9 trillion) the previous month, reflecting a sharp increase in liquidity.
The monetary base (M0) is expected to grow by 17.2% in 2025, adding approximately 2.21 trillion yuan ($303 billion), while broader money supply (M2) could expand by 7%, injecting around 22.17 trillion yuan ($3.04 trillion) into the economy (Bitcoin.com)
The People’s Bank of China (PBOC) is lowering reserve requirements and interest rates to combat deflation, stimulate domestic demand, and reduce reliance on exports. This monetary shift is also seen as a strategic defense against U.S. tariffs from the Trump Administration, positioning China to hopefully absorb economic shocks and weaken any U.S. economic leverage. If other central banks follow suit, the resulting wave of liquidity could push asset prices higher—especially Bitcoin, which has historically thrived in inflationary and looser monetary environments.
Definitely something to keep an eye on.
“If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end"
— China's US Embassy X Account
Bond Market
Recent moves in the bond market are signaling both optimism and concern about the global economy. U.S. Treasury yields have risen, driven by stronger-than-expected economic data and policy shifts, suggesting that investors see resilience in growth despite any lingering uncertainties.
However, global government borrowing is set to hit record levels in 2025, largely due to rising defense spending and the burden of higher interest rates, raising questions about long-term debt sustainability — as of February 5, 2025, the US national debt was $36.22 trillion.
At the same time, corporate bonds are increasingly being viewed as safer investments than some government securities, reflecting shifting perceptions of risk and stability. These trends highlight a mixed outlook—markets are cautiously optimistic about economic strength, but fiscal challenges loom large.
Treasury Yields Ease Slightly: The 10-year Treasury yield dipped to 4.22%, reflecting shifting investor sentiment on economic growth and interest rate expectations.
The Japanese 10-year yield hit 1.5% for first time since 2009 this week (MacroEdge)
Mortgage Rates Hit Lowest Level Since December: The average 30-year fixed mortgage rate fell to 6.55%, continuing a downward trend that has spurred increased demand for home loans.
Market Volatility Intensifies on Tariff News: Stocks dropped sharply following new trade tariffs on Canadian and Mexican imports, compounded by weaker-than-expected manufacturing data.
Bank Regulations May Boost Treasury Demand: Talks of easing capital rules for banks have driven renewed interest in U.S. Treasuries, signaling potential shifts in financial sector liquidity.
Recession Fear is Growing: Concerns over economic slowing have resurfaced as manufacturing activity declines and inflation pressures mount due to trade policy changes.
This week, German and Japanese bond markets saw pretty sharp moves, reflecting shifting fiscal and monetary policies that could have global implications. Germany’s 10-year Bund yield surged, marking its biggest jump in decades, as the government loosened fiscal constraints to fund massive infrastructure and defense spending.
This clearly signals a shift toward higher borrowing and deficit spending, which could drive yields even higher. Meanwhile, Japan’s 10-year government bond yield hit a 16-year high as the Bank of Japan signaled further rate hikes, moving away from its ultra-loose monetary policy.
These developments highlight a broader trend in global bond markets: rising yields and a shift away from easy money policies. Investors are adjusting to higher debt issuance in Europe and tighter monetary conditions in Japan, both of which could put upward pressure on global borrowing costs.
Crypto
This week, the crypto market has been defined by regulatory shifts, institutional forecasts, and price action reflecting broader macro trends.
Bitcoin and various cryptos rebounded a bit off the most recent dump as investor sentiment improved amid potential shifts in trade policy. Bitcoin has moved back to about $91,000 as of 7:00pm ET yesterday. Meanwhile, regulatory discussions took center stage, with the White House preparing for a crypto summit Friday and the Senate voting to overturn a tax rule that targeted DeFi platforms, signaling a potential shift in how digital assets are governed.
Institutional interest in crypto continues to grow in the wake of Citadel announcing their entrance to the markets, with analysts predicting that North American crypto ETFs could surpass precious metals ETFs in assets under management by 2025, driven by potential approvals for tokens like Solana and XRP (which were mentioned alongside BTC and ADA in Trump’s recent TruthSocial post).
Overall, the market remains in a strong position in my opinion, with rising institutional adoption and evolving regulatory clarity shaping its trajectory.
The board of Nasdaq-listed BioNexus Gene Lab has approved Ethereum as its primary treasury asset (CoinTelegraph)
Michael Saylor said this week that a "Bitcoin Strategic Reserve positions the US as the leader in the race to dominate cyberspace” (WatcherGuru)
Coinbase is looking to release their tokenized COIN
Fidelity bought $21.7M worth of $ETH yesterday (CryptoRover)
Trump backed World Liberty Financial bought $25M worth of $WBTC, $ETH, and MOVE last night (CoinTelegraph/Wallet Data)
Pump. fun volume dropped by 63% in February, from $119 billion to $44 billion in the first two months of 2025 (CoinTelegraph)
In the short term the major catalyst crypto bros are likely looking for is the Friday White House crypto summit. All kinds of speculation is emerging on what might happen but the roster of those invited is heavy and includes many industry heavyweights.
Michael Saylor appeared on financial networks this week looking extra cheerful (does he know something) and talking about concepts surrounding a potential Strategic Bitcoin Reserve. As I mentioned earlier we know Trump plans to include SOL, XRP, ADA, ETH, and BTC in one or more of these reserves. Personally I would be shocked if LINK wasn’t also included as several reporters are mentioning Sergey Nazarov will be present on Friday as well.
Full list is below.
Could this be a buy the rumor sell the news event? Maybe. But I am more inclined to think that this serves as a new launch pad for crypto in 2025.
Short term macro and tariffs are not doing risk on assets any favors, but it’s important to keep in mind the larger pullback we have seen in Bitcoin and across crypto is not atypical for a pull back in a bull cycle. We have seen many 20-35% pullbacks in past cycles that eventually get bought up as we chug higher.
The meme coin frenzy that characterized the last 6 months or so should die down in my opinion, especially as institutions and bigger companies begin to pivot and seriously look at utility tokens and crypto strategies in the coming months. We could even get some sort of totally unexpected announcement from this administration re: capital gains, taxes, or other items that could propel us higher.
Don’t get shaken out kings.
There is some serious bullish shit brewing.
Specific Market Plays
Let’s talk a bit about what I am buying right now as a follow up to some of the ideas covered in the post on My Top Asset Picks in 2025 from a few weeks ago. LMT 0.00%↑ is already up $40 since this post dropped.
I wasn’t fully expecting the pullback we saw in markets shortly after this post, not sure anybody could. But for the record I am still bullish on all names listed in that guide, but particularly on AAVE, Broadcom, Tesla, ASML, and Chainlink in 2025.
Right off the bat I am loading up on Ethereum. If you guys have read recent Arb Letter posts you’ve probably caught me mentioning I think ETH is going to melt at some point. It’s honestly not possible sentiment gets worse unless of course it god dumps under $2,000. If that’s the case I will back the truck up even more depending on how the broader market looks.
Ethereum is being purchased by major financial institutions, Trump affiliated organizations, and was already mentioned as being a piece of the reserve eventually. I think Ethereum is going to shock many people and my sixth sense is telling me to load up — so I am. I will eat my hat if I am wrong but I think ETH is going to shock everyone.
I bought more Bitcoin in the past two weeks as well — not an insane amount but a few clips of good DCA buys on the bloodiest days to add to my long term stack. As I have said before at $200,000 I’m not going to care if I bought it at $70,000 or $90,000.
I truly think we’re going to get a face melting rip in crypto this year — when it comes people are really going to wish they had gone shopping during times like last week when sentiment was absolute dog shit. Alts I do not have a position but want to have one (or have a small one that need to be bigger) include:
AAVE
XRP
INJ
HBAR
SNEK
The two meme coins I still hold are PEPE and ZYN. Have no plans on selling either until ETH hits an all time high.
On the equities front I have purchased more META 0.00%↑ INTC 0.00%↑ RTX 0.00%↑ PLTR 0.00%↑ and SPY 0.00%↑ to add to my various brokerage accounts.
Though I am probably a little too late given the SPY and QQQ data I mentioned on puts earlier, yesterday was probably a good time to pick up some shorter dated call options on SPY/QQQ — you can feel the bounce coming and with a little luck Friday could end up being a wild day, particularly if we get updates from Trump on his conversations with Trudeau or leaders from other nations impacted by tariffs.
I don’t know enough about oil to get involved right now but would be interested in learning more about people’s thoughts if you guys want to leave a comment. The biggest sector I am looking to build a position in is probably Defense right now, with a heavier weighting towards companies on the forefront of AI. I still hold part of my PLTR 0.00%↑ long and BBAI 0.00%↑ as well.
As the market digests this tariff noise these will likely rebound once again.
Let’s see how this week wraps up and we can make some adjustments or updates next week when we hopefully have more information on the duration or severity of these tariffs and maybe some more clarity on crypto’s path in 2025 under the current administration.
As of 11:30pm ET last night when I finished writing this up — crypto was looking like it was starting to coil a bit, maybe it’s getting ready to pop off. Godspeed to all of you, I will catch you in the Discord and on X over the weekend.
That’s all for today guys — next week we will get into another classic Arbitrage Andy guide, either watches, spring fashion, or deal sleds so everyone can look fly as fuck boi as the weather warms up.
Have a good rest of the week.
Andy
BullX Crypto Trading Software
Gemini Crypto - Get Free Bitcoin
Disclaimer - I am a former trader, enterprise sales rep, and current entrepreneur with a monkey brain. Nothing I say should be considered formal financial advice or life advice, these are my opinions - always do your own research and diligence before investing and ensure you have a good understanding of your personal risk tolerance.
Andy,
Doing any bright, shiny, pet rock purchasing as a hedge?