What Wealth Managers Need to Know About the U.S. Economic Outlook for 2025
Published April 2, 2025 – 
By Paul Beland, Global Head of Research – Wealth Management
Volatility, Resilience, and What’s Next
As we look ahead to 2025, financial advisors are facing one of the most complex macroeconomic environments in recent memory. Between geopolitical trade tensions, shifting Fed policy, and signs of both strength and stress in consumer behavior, advisors must navigate a market landscape where every move counts.
Will the U.S. slip into recession or continue its path of moderate growth? Are clients positioned correctly to withstand the next 12-24 months of volatility? What role should cash, equities, and fixed income play as we turn the corner into a new economic cycle?
These are the questions CFRA tackles in its newly released 2025 U.S. Recession Outlook and Economic Trends. While the full report is available to download below, we’re pulling back the curtain on several key themes you need to understand now—before your clients ask.
A Soft Landing or Something More Turbulent?
CFRA’s base case sees slower U.S. growth in 2025, but not a recession. Yet, risks are rising each month as trade tensions persist. Businesses are hesitant to invest. Consumers are spending—but increasingly on credit. And while corporate earnings remain strong, several leading indicators are flashing yellow.
Consumers Are Still Spending… But At What Cost?
With nearly 70% of GDP tied to personal consumption, it’s encouraging to see consumer spending holding firm. But dig a little deeper and the stress becomes clear: savings rates are low, credit card balances have surged past $1.2 trillion, and delinquency rates are climbing.
As a financial advisor, are your clients shielded from the potential impact of an over-leveraged consumer base?
Corporate Earnings: A Beacon of Strength
Despite macro uncertainty, corporate America is still delivering. S&P 500 earnings are projected to grow 9.5% in 2025 and 14.4% in 2026, with 10 of 11 sectors seeing upward revisions in Q4 2024. This could be a vital lever for portfolio resilience—but only if equity exposure is appropriately balanced with cash and fixed income allocations.
Asset Allocation Insights: CFRA’s Updated Recommendations
With rate volatility expected and geopolitical policy adding further uncertainty, CFRA’s outlook suggests rebalancing toward higher cash holdings (10%) and modestly trimming bond allocations to 25%, while keeping equities steady at 60%.
Wondering how this shift might affect your clients’ risk-adjusted returns?
