The current business cycle is anything but ordinary, diverging significantly from historical norms and shaped by transformative structural shifts. These changes, driven by exogenous shocks and powerful trends, have altered the traditional cyclical trajectory of expansion, peak, contraction, and trough. As we entered last year, many experts predicted a slowdown or even a recession, citing indicators such as weak manufacturing activity, an inverted yield curve, and aggressive monetary tightening. Yet, the U.S. economy defied gravity, exhibiting a rare combination of robust GDP growth and moderating inflation. It begs the question, how were so many economists and forecasters wrong about the direction of the economy?
Please enjoy the fifth theme release in our six-part series leading up to the release of Waterloo Capital’s 2025 Annual Outlook.