This investment firm in Austin recently published their latest and greatest Economic Overview outlook as of end of First Quarter 2025. Curious what posters think.

Hoisington Investment Management Company - Economic Overview

Bullet point summaries (exerpt):

Five pivotal U.S. economic considerations, including tariffs, monetary policy, fiscal policy, debt overhang, and demographics, are aligning to depress economic growth for the balance of this year and into 2026.

First, the recessionary effects of tariffs, supported by compelling historical evidence and economic theory, will dominate the inflationary ones, potentially leading to a significant reduction in world trade and capital flows.

Second, the Fed's continued maintenance of a highly restrictive monetary situation is significant and could have severe implications. A significant reversal in Federal Reserve policies this year is necessary for economic acceleration in 2026.

Third, current federal spending plus the lagged negative multiplier effects from 2021 to 2024 will reduce economic activity this year. Benefits from the presumed tax reductions will impact 2026, but their delay will cause fiscal policy restraint for 2025.

Fourth is federal indebtedness. After an unprecedented surge, the existing level of government debt will continue to drain economic activity. This pattern of excess debt restraining growth has been observed throughout history and noted by such outstanding thinkers as David Hume and Adam Smith in the eighteenth century; David Ricardo in the nineteenth century; Nikolai Quarterly Review and Outlook First Quarter 2025 Kondratiev, Irving Fisher, Charles Kindlelberger, and Hyman Minsky in the twentieth century; and Carmen Reinhardt, Vincent Reinhardt, Kenneth Rogoff (RRR), Andreas Bergh, Magnus Henrikson, and others in the past 25 years.

Lastly, the border closing also poses a very consequential drag on near-term economic growth. The U.S. population increased by 3.3 million or about 1% in 2024, the fastest pace since 2001. Immigration, dominated by illegal entry, accounted for 84% of this increase. Global Economics at Goldman Sachs estimates "net immigration by the end this year will total 500,000" compared with slightly over 2.5 million in 2024. Immigration's recent history of indirectly boosting employment and raising both government and private spending is coming to an abrupt end.

Pumpkinhead said:

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This investment firm in Austin recently published their latest and greatest Economic Overview outlook as of end of First Quarter 2025. Curious what posters think.

Hoisington Investment Management Company - Economic Overview

Bullet point summaries (exerpt):

Five pivotal U.S. economic considerations, including tariffs, monetary policy, fiscal policy, debt overhang, and demographics, are aligning to depress economic growth for the balance of this year and into 2026.

First, the recessionary effects of tariffs, supported by compelling historical evidence and economic theory, will dominate the inflationary ones, potentially leading to a significant reduction in world trade and capital flows.

Second, the Fed's continued maintenance of a highly restrictive monetary situation is significant and could have severe implications. A significant reversal in Federal Reserve policies this year is necessary for economic acceleration in 2026.

Third, current federal spending plus the lagged negative multiplier effects from 2021 to 2024 will reduce economic activity this year. Benefits from the presumed tax reductions will impact 2026, but their delay will cause fiscal policy restraint for 2025.

Fourth is federal indebtedness. After an unprecedented surge, the existing level of government debt will continue to drain economic activity. This pattern of excess debt restraining growth has been observed throughout history and noted by such outstanding thinkers as David Hume and Adam Smith in the eighteenth century; David Ricardo in the nineteenth century; Nikolai Quarterly Review and Outlook First Quarter 2025 Kondratiev, Irving Fisher, Charles Kindlelberger, and Hyman Minsky in the twentieth century; and Carmen Reinhardt, Vincent Reinhardt, Kenneth Rogoff (RRR), Andreas Bergh, Magnus Henrikson, and others in the past 25 years.

Lastly, the border closing also poses a very consequential drag on near-term economic growth. The U.S. population increased by 3.3 million or about 1% in 2024, the fastest pace since 2001. Immigration, dominated by illegal entry, accounted for 84% of this increase. Global Economics at Goldman Sachs estimates "net immigration by the end this year will total 500,000" compared with slightly over 2.5 million in 2024. Immigration's recent history of indirectly boosting employment and raising both government and private spending is coming to an abrupt end.

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Open borders is the key to prosperity.

That was certainly a mixed bag. Were they purposely trying to pick and choose issues for both sides to like?

Who?

That Fed restrictive interest rate comment is one that Trump would seemingly agree with, correct? He has been making those threats to remove Powell because he thinks the Fed rate is too high?

YouBet said:

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That was certainly a mixed bag. Were they purposely trying to pick and choose issues for both sides to like?

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That investment firm's website says they have over $2 billion in management, primarily comprised of pension and profit sharing plans of corporate and government entities. Probably some posters here have some money being managed by them.

Those economic outlooks they publish (debate whether analysis is good or not aside) are probably not written as political talking points for some side. They are in the business of making money.

ts5641 said:

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Logos Stick said:

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Open borders is the key to prosperity.

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Amazing they believe this. We're not a country if we don't have borders. Maddening.

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Putting the politics aside and just being an investor. If population growth significantly and abruptly decreases from one year to the next (whether legal or illegal) could that negatively affect short-term economic growth in some areas?

This is what this investment management firm's short term economic outlook report is saying, that they put out every quarter (what they think from crunching their numbers).

Better open the cornpop invasion back up since it might hurt the economy


Yikes what a god awful take

Pichael Thompson said:

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Better open the cornpop invasion back up since it might hurt the economy


Yikes what a god awful take

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Recommend reading and judging a report like that as an investment management firm take, not a political take. Here is what is currently happening, how might that affect the financial markets, how might that determine short and long term investment strategy.

No it doesn't sound logical

Claiming the American govt allowing invasion of millions, and then printing money to transport/house/support is a net positive for the economy is disingenuous at best


It's the equivalent of the government claiming we aren't in a recession by claiming money printing shows economic growth

Logos Stick said:

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Memphis is correct. This 0 percent rate that we had for 8 years under the Marxist is total nonsense.

We are close to normal right now.

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If they have significant real estate holdings, they are probably looking down the barrel of the refi gun. Higher rates today over when they acquired things lowers the values to where they may not be able to handle the debts coming due.

But don't worry, plenty on here will argue in the next few days that Powell needs to quit playing politics and do as the president says. Lower the target rates.

If we cut off a lot of extravagant welfare, we could light a fire under a lot of domestic wastrels butts with a little hunger and want and knock out some deficit and labor supply needs all at once.

Just stay the course, I'm sure Trump's economic boom will kick in any day now.

That settles it. Investment firm in Austin has shown the way. What we really need is continuous overspending without a single solitary F given about debt or ability to make interest payments on debt, continuing the proliferation of dependencies on China, raising taxes on the remaining 50% of people who still pay taxes, more forever wars, and a continued pace of allowing +/- 5 million mass migrants per year from over 180 different countries to waltz on in here and claim asylum because they're poor and want free stuff. Good job presenting your case, democrats. That's why you're so popular.

Where was this report during the last administration? Biden kept Trump's first term tariffs and even expanded a few. What else has changed? demographics is probably also changing...

MouthBQ98 said:

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If we cut off a lot of extravagant welfare, we could light a fire under a lot of domestic wastrels butts with a little hunger and want and knock out some deficit and labor supply needs all at once.

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But that would be cruel and seen as the rich exploiting the desperate poor.

Its amazing how people complicated economics. In its purest form it can be factored down to the proverbial example of a plane crash on a tropical island. First need: food, water, and a medical response. Requiring 100% of the able or even partially able portion of the population to work to meet the current urgent needs.

Society is almost immediately layered based on those that meet the urgent needs. Those that dont work are an actual drain and a net negative regarding the ability to meet the urgency. What is their fate ?

But, but, but, that situation doesn't exist ion the US ? Well maybe the mind set should. We'd be a heck of a lot better off

No wonder they dont require Animal farm and Lord of the flies in school these days. Then there is Paul in Thessalonians saying you dont work you dont eat.

Never mind them understanding the money supply, interest rates, debt to GDP, labor markets, etc, etc,etc

ttu_85 said:

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MouthBQ98 said:

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If we cut off a lot of extravagant welfare, we could light a fire under a lot of domestic wastrels butts with a little hunger and want and knock out some deficit and labor supply needs all at once.

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But that would be cruel and seen as the rich exploiting the desperate poor.

Its amazing how people complicated economics. In its purest form it can be factored down to the proverbial example of a plane crash on a tropical island. First need: food, water, and a medical response. Requiring 100% of the able or even partially able portion of the population to work to meet the current urgent needs.

Society is almost immediately layered based on those that meet the urgent needs. Those that dont work are an actual drain and a net negative regarding the ability to meet the urgency. What is their fate ?

But, but, but, that situation doesn't exist ion the US ? Well maybe the mind set should. We'd be a heck of a lot better off

No wonder they dont require Animal farm and Lord of the flies in school these days. Then there is Paul in Thessalonians saying you dont work you dont eat.

Never mind them understanding the money supply, interest rates, debt to GDP, labor markets, etc, etc,etc

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Well said. You have retained the status of my favorite Tech poster.

Logos Stick said:

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Open borders is the key to prosperity.

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True. Yet, we can't just let anybody in. We have to be very selective. It is well a well known fact in elite business circles that violent felons make the best workers. This the group we need to focus in on like a laser and flood the U.S with them. This is indeed the raod to prosperity for America!!!

techno-ag said:

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ttu_85 said:

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MouthBQ98 said:

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If we cut off a lot of extravagant welfare, we could light a fire under a lot of domestic wastrels butts with a little hunger and want and knock out some deficit and labor supply needs all at once.

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But that would be cruel and seen as the rich exploiting the desperate poor.

Its amazing how people complicated economics. In its purest form it can be factored down to the proverbial example of a plane crash on a tropical island. First need: food, water, and a medical response. Requiring 100% of the able or even partially able portion of the population to work to meet the current urgent needs.

Society is almost immediately layered based on those that meet the urgent needs. Those that dont work are an actual drain and a net negative regarding the ability to meet the urgency. What is their fate ?

But, but, but, that situation doesn't exist ion the US ? Well maybe the mind set should. We'd be a heck of a lot better off

No wonder they dont require Animal farm and Lord of the flies in school these days. Then there is Paul in Thessalonians saying you dont work you dont eat.

Never mind them understanding the money supply, interest rates, debt to GDP, labor markets, etc, etc,etc

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Well said. You have retained the status of my favorite Tech poster.

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Wow ! With the likes of Titan, Tramp96, RaiderJay as competition I'll take that as a big complement.

Secolobo said:

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Where was this report during the last administration? Biden kept Trump's first term tariffs and even expanded a few. What else has changed? demographics is probably also changing...

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If you go to their website, they have published a quarterly Economic Outlook report over the past few years. So for example, you can see what they were saying in Q1 of 2024. You can go back to as far as Q1 2022.

oh no said:

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That settles it. Investment firm in Austin has shown the way. What we really need is continuous overspending without a single solitary F given about debt or ability to make interest payments on debt, continuing the proliferation of dependencies on China, raising taxes on the remaining 50% of people who still pay taxes, more forever wars, and a continued pace of allowing +/- 5 million mass migrants per year from over 180 different countries to waltz on in here and claim asylum because they're poor and want free stuff. Good job presenting your case, democrats. That's why you're so popular.

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That article could be interpreted as government spending related to open borders has now come to an abrupt end and near-term investment strategy might need to account for that. It is not necessarily to be interpreted as a Democratic talking point paper of how open border (mass illegal immigration) is a great long-term idea.

When I oarticipate in quarterly reviews with my own financial advisors, politics is treated like the weather. We discuss what is currently happening and forecasts of what might happen, and how that might affect financial risks or opportunities. We don't spend much time in those discussions opining politically of what we wish was different or want because that is mostly a waste of time. Only thing that matters is what IS happening and what MIGHT happen.

I was curious what posters maybe thought of this investment firms analysis purely in those apolitical terms but I guess hard to get much feedback like that on a politically charged message board like this.

Quote:

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This is hilarious! The Fed's short term rate of 4.0 to 4.25 is not high by historical standards. The median over the last 50 to 70 years is 4.3, which puts the Fed's current rate just under that. They were at this level as recent as 2007 before the latest bump from artificial lows. Today's interest rates are normal.

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This.

The era of cheap money is over.

ttu_85 said:

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techno-ag said:

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ttu_85 said:

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MouthBQ98 said:

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If we cut off a lot of extravagant welfare, we could light a fire under a lot of domestic wastrels butts with a little hunger and want and knock out some deficit and labor supply needs all at once.

---

But that would be cruel and seen as the rich exploiting the desperate poor.

Its amazing how people complicated economics. In its purest form it can be factored down to the proverbial example of a plane crash on a tropical island. First need: food, water, and a medical response. Requiring 100% of the able or even partially able portion of the population to work to meet the current urgent needs.

Society is almost immediately layered based on those that meet the urgent needs. Those that dont work are an actual drain and a net negative regarding the ability to meet the urgency. What is their fate ?

But, but, but, that situation doesn't exist ion the US ? Well maybe the mind set should. We'd be a heck of a lot better off

No wonder they dont require Animal farm and Lord of the flies in school these days. Then there is Paul in Thessalonians saying you dont work you dont eat.

Never mind them understanding the money supply, interest rates, debt to GDP, labor markets, etc, etc,etc

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Well said. You have retained the status of my favorite Tech poster.

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Wow ! With the likes of Titan, Tramp96, RaiderJay as competition I'll take that as a big complement.

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Alas, Titan gets busy with stuff like writing books or something and disappears for months on end. But you'll do as the prime rep for now.