Finance

The Cost of Growth: Navigating Inflation in 2025

After the Federal Reserve signaled a more hawkish stance for 2025, investors are now factoring monetary policy into the growing list of uncertainties that could impact the market next year. In a conversation with Brad Smith and Brian Sozzi, Ben Emons, founder and chief investment officer of Fed Watch Advisors, shares his outlook on the US economy in 2025 and its implications for investors.

As 2024 draws to a close, Emons notes that investor sentiment remains notably bullish. "We feel really good about the economy and the markets. Volatility is relatively contained, and despite the Fed's shift from recalibrating to a new phase, as Powell described it, we seem to be in control of what's happening," he says.

However, Emons cautions that significant uncertainties loom. "We're facing a lot of new developments from the Trump administration, which, while pro-growth, also presents several challenges," he adds.

Despite these uncertainties, Emons maintains a positive outlook for the US economy. "I do think it's a bullish scenario for the US economy, and we could even see 5% GDP growth, but it won’t come without volatility," he notes. "I expect higher-than-average volatility next year, driven by the increased policy uncertainty compared to this year." Emons concludes, "There's no free lunch—economic growth will likely come with higher inflation."

TECH

If Climate Tech is Dead, What’s the Future of Sustainable Innovation?

Humans have an innate need to name things, though, let's face it, we're not always great at it.

Take climate tech, for instance. It’s a category of companies and technologies aimed at reducing or reversing our environmental impact while also helping us adapt to the increasing changes in the climate. As far as labels go, "climate tech" is actually a decent one—succinct and to the point, capturing the sector's focus in just two words.

It's certainly an improvement over its predecessor, clean tech. Startups that now fall under the climate tech umbrella would likely have identified as clean tech companies just over a decade ago. However, clean tech wasn’t the most effective label. To the untrained eye, "clean tech" could just as easily refer to robot vacuums or innovative household products. "Climate tech" is much clearer in its intent.

But, as with all things, time moves on. Climate tech has been around for almost a decade now, and humans like to think of themselves as being on the cutting edge of something new. Add to that the fact that climate tech’s scope has expanded to the point where it’s starting to feel a bit too broad. Over the past year or so, some have started exploring alternative terms.

One early contender was "planetary health," first coined by The Lancet in 2014. Some investors have warmed to the term, partly as a way to narrow the focus, since not all companies in this space tackle carbon pollution directly but still focus on technologies addressing humanity’s broader environmental impact. It has its appeal, though most people still prefer "climate tech."

Then, of course, came Donald Trump’s re-election. While "climate" hasn’t exactly turned into a dirty word, there’s been an increasing effort to distance from the term. That shift had already begun before the election. In five years, we may well be calling climate tech something else entirely.

What might that be? People are testing out ideas, hoping one will catch on. "Planetary health" remains a strong contender—it’s clear, descriptive, and has an early lead. Another option might be the "American dynamism" platform, which includes a clean energy focus, though this term is tightly linked to a16z, the venture capital firm whose partner Katherine Boyle coined the term and leads that particular practice. That label also includes a range of other sectors like defense, public safety, education, and housing, making it less specific to just climate tech.

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CRYPTO

Trump's Second-Term Team: Crypto and Defense Picks Take Center Stage

President-elect Donald Trump has selected key figures for defense and crypto policy roles in his upcoming administration, officially naming billionaire Stephen Feinberg as the No. 2 at the Pentagon and choosing Michael Kratsios to oversee tech policy at the White House.

Trump plans to nominate Kratsios for the Senate-confirmed position of Director of the Office of Science and Technology Policy. The managing director of Scale AI, Kratsios previously held technology-related roles in Trump’s first term and has been assisting in staffing the Department of Government Efficiency, an initiative led by Elon Musk aimed at reducing the size of the federal government.