Two the Point — 2025 Mid-Year Outlook: Building Resilience

Andrew Davis, CFA®

Bryn Mawr Trust Advisors

May 22, 2025

< 1 min read

Two the Point

The first half of 2025 brought major shifts, from sweeping tariffs to a surprising AI breakthrough out of China. Our Mid-Year Outlook explores what these developments mean for growth, inflation, and market strategy heading into the back half of the year.

Key Insights:

U.S. tariff policy raised the effective rate from ~2% to over 20%, lifting near-term inflation and creating headwinds for growth.
China’s DeepSeek R1 AI model challenges U.S. dominance in tech, with 10x+ energy efficiency and geopolitical implications for innovation leadership.
Q1 GDP showed a -0.3% annualized decline, but core demand rose +3.0%, driven by front-loaded imports ahead of tariffs.
Labor market remains firm, with job gains averaging ~140,000 per month and unemployment steady just above 4%.
Fed likely remains on hold, facing a supply-side dilemma between price stability and full employment.
Our base case: 1.0% real GDP growth in 2025, with inflation ending the year above 3%.

Join us on June 4 for our Mid-Year Outlook Webinar as we dig deeper into these themes and their portfolio implications.

Andrew Davis, CFA®

Bryn Mawr Trust Advisors

Andrew Davis leads a team that analyzes broad economic trends and factors that impact global and national economies. He joined the company in 2019.

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