We’ve reached the halfway point of 2025; and the economic landscape continues to shift in unpredictable ways. Markets have experienced volatility, policy changes have introduced new variables, and global uncertainty remains a persistent backdrop. In this mid-year update, we’ll review key events from the first half of the year, outline major economic trends, and share insights into what it all could mean for your retirement planning. 

For this update, we invited economist Tom Siomades, CFA, to offer perspective rooted in data and institutional insight. His independent analysis helps clarify what recent economic developments could mean for retirement planning. 

A Volatile Start to 2025 

The year began with optimism. A new presidential administration and expectations for pro-growth policy led to a strong January rally. Historically, positive January performance has been a signal for bullish markets, and early indicators pointed toward a solid economic year. 

But that momentum was soon disrupted. In April, the administration introduced a wide-ranging legislative package—known as the “Big Beautiful Bill”—alongside an aggressive set of proposed tariffs. The announcement sparked a sharp market response: equities declined, Treasury yields swung, and investor sentiment shifted. 

Shortly after, implementation of several tariffs was delayed, and markets began to stabilize. While some sectors now sit near all-time highs, volatility hasn’t disappeared—it has simply shifted shape. 

The Tariff Effect 

A central story of 2025 is the renewed use of tariffs as a policy tool. The administration’s strategy to restructure trade deals globally and simultaneously has drawn attention from economists who question the long-term effectiveness of this approach. 

With a 90-day pause in effect, markets are watching closely. Will broad tariffs return, or will more targeted regional agreements emerge? For retirees, the significance lies beyond the headlines. Tariffs can influence inflation, affect consumer behavior, and create ripple effects in portfolios. 

Inflation, Recession Concerns, and the Fed 

One concern tied to tariffs is whether they could reignite inflation. Tom Siomades challenges the assumption that tariffs will drive widespread inflation. While certain goods may rise in price, he argues that overall consumer spending power may decline, reducing upward pressure on prices unless accompanied by stimulus or wage growth. 

Meanwhile, employment data has become more mixed. A disappointing ADP jobs report raised concerns about a slowdown, even as other indicators remain resilient. All eyes now turn to the Federal Reserve. Will they cut rates to support the economy? 

Siomades believes rate cuts are likely—potentially two to three before year-end. Economic data and political tension are building pressure. However, any action by the Fed may be scrutinized in light of public criticism from the administration, adding complexity to their decisions. 

The Big Beautiful Bill: What’s at Stake? 

The legislative centerpiece of 2025, dubbed the “Big Beautiful Bill,” is a sweeping proposal that touches nearly every corner of the federal budget. Among its provisions: 

• Extension of individual tax cuts 

• Reductions in programs like Medicaid 

• Increased government and military spending 

The bill’s estimated cost is over $3 trillion added to the national debt, which now exceeds $36 trillion. Supporters argue it will stimulate growth by reducing tax burdens and boosting private sector activity. Critics warn of long-term fiscal strain. 

Regardless of where one stands, markets prefer clarity. Whether the bill passes or not, defined policy gives businesses and investors the ability to make forward-looking decisions. 

Market Outlook: What Could Happen Next 

So far, the market has shown resilience: 

• A strong January rally 

• A correction tied to trade uncertainty 

• A rebound following the tariff delay 

According to Siomades, if economic growth accelerates and the legislation passes, markets could rise another 10% in the second half of the year. However, volatility is expected to remain elevated. 

Here are a few scenarios to watch: 

1. Tariffs Return – Could spark renewed market stress and margin pressure. 

2. Targeted Deals Replace Broad Tariffs – May ease uncertainty and support stability. 

3. Federal Reserve Cuts Rates – Could benefit interest-sensitive sectors and help moderate recession fears. 

4. The Bill Passes – Provides clarity, which markets generally welcome. 

5. The Bill Fails – May lead to gridlock and higher uncertainty in equity pricing. 

Estate Planning and Legislative Watch 

In times of uncertainty, planning becomes more important—not less. Tax changes and spending shifts can influence retirement strategies, which is why we encourage staying informed but focused on your long-term plan. If you’re already working with a planner, this is a good time to review how potential legislation might affect your retirement income strategy. 

What Should You Do Now? 

You don’t need to predict the market or the next policy decision to retire successfully. Here’s how to think about your financial future in the face of uncertainty: 

1. Diversify with Purpose 
   Creating a balanced portfolio that includes growth, income, and non-correlated assets can provide stability. Over-concentration can lead to vulnerability in volatile markets. 

2. Use a Bucket Strategy 
   At Peace of Mind Wealth Management, we guide clients through a three-bucket approach: 

• Cash Bucket – For emergency and near-term needs 

• Income & Safety Bucket – Stable, lower-volatility investments to meet essential income needs 

• Growth Bucket – For longer-term investments with potential for higher returns 

This framework reduces the pressure to sell growth assets during market dips to meet living expenses. 

3. Stress-Test Your Plan 
   Model how your plan holds up under various scenarios: inflation, stock market declines, interest rate cuts, or tax changes. Preparation builds peace of mind. 

4. Stay Informed—But Not Reactive 
   Understanding major economic policies can be empowering—but avoid knee-jerk decisions. Focus on what you can control, and let your plan do the work. 

Final Thoughts: Staying Grounded in Uncertainty 

The second half of 2025 could bring more volatility, more headlines, and more unknowns. But retirement success doesn’t come from guessing—it comes from preparation. 

By building a flexible plan, staying diversified, and focusing on long-term goals, you can navigate uncertainty with clarity and confidence. 

Want to talk this through? We offer a complimentary 15-minute phone call, if we can’t answer everything in one call, we’ll guide you to the next steps. 

Investment Advisory Services offered through POM Investment Strategies, LLC dba Peace of Mind Wealth Management (“POM”), a Registered Investment Advisor.  Tom Siomades is not affiliated with Peace of Mind Wealth Management.  This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. Investors should carefully consider the investment objectives, risks, charges and expenses associated with any investment.   Always consult an investment advisor, attorney or tax professional regarding your specific situation.