

2025 Economic Outlook: Firing on All Cylinders
17 snips Dec 16, 2024
Torsten Sløk, Apollo's Chief Economist, shares his insights into the 2025 Economic Outlook, focusing on a projected 2.3% GDP growth and a low unemployment rate of 4.3%. The discussion highlights the resilience of the U.S. economy and the role of AI in driving productivity. Geopolitical tensions and their impact on economic stability are explored, with a cautious optimism due to recent de-escalations. Sløk also addresses the effects of rising government deficits on interest rates and the changing dynamics of consumer spending.
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2025 Economic Outlook
- Torsten Sløk forecasts 2.3% GDP growth, 4.3% unemployment, and <2.5% inflation for 2025.
- These figures signal a modest slowdown but remain strong overall, exceeding long-run projections.
Inflation Drivers
- Service inflation is primarily driven by wages, which remain strong due to a robust labor market and low unemployment.
- Torsten Sløk suggests a gradual cooling of the labor market is needed to curb inflation.
US Economic Resilience
- US consumers and firms locked in low interest rates during the pandemic, making them less sensitive to Fed rate hikes.
- This reduced sensitivity is because 95% of US mortgages have fixed rates, unlike other OECD countries.