As we enter 2025, the global and domestic landscapes are poised for a number of transformative events. From geopolitical shifts to economic trends to dizzyingly rapid technological advances, this year promises to be as turbulent as it will be consequential. Hence, we are titling our 2025 forecast Resetting the Global Chessboard, because we believe the long-term effects of events in 2025 will prove to be that significant.
Here are Greymantle’s top 10 predictions for 2025, followed by a preview of the broader themes and topics we’ll be covering on the blog throughout the year.
Top 10 Predictions for 2025
1.The U.S. Economy Will Boom in 2025. In the first year of President Trump’s second term, the U.S. economy will undergo a notable expansion. Despite concerns over democratic backsliding, consumers, businesses, and financial markets will largely ignore the political noise. We project that U.S. GDP will expand by 2.4% to 2.7%. The politically “red” portions of the United States, who had expressed the greatest dissatisfaction with the economy during the Biden Administration, will get their groove back under Trump and open their wallets to spend. The expansion will be fueled by tax policies weighted towards tax cuts, substantial deregulation, and irrational optimism among consumers and investors — a classic recipe for economic overheating.
2. Inflation to Rise Again. We expect inflation, which had been decreasing in 2024, to rise in the latter half of 2025 due to the implementation of Trump’s tariff policies, including tariffs of 25% to 50% on Chinese goods and 5% to 10% on Canadian and Mexican goods, along with increased tariffs on EU imports. The Federal Reserve may initially hesitate to raise interest rates but could be compelled to do so by rising prices, while also facing pressure from the White House to lower rates, potentially leading to further economic overheating.
3. The ‘Trump Bubble’ Begins. 2025’s economic boom will give rise to the ‘Trump Bubble,’ characterized by surging financial markets driven by optimistic investor sentiment, while the risks are overlooked. We expect this bubble, heavily influenced by private credit markets and cryptocurrencies, to grow unchecked until its collapse around 2029 or 2030. It will represent an unprecedented bubble in federal debt and private credit.
4. A Temporary Armistice in Ukraine. President Trump will push Ukraine and NATO to accept a temporary armistice with Russia in the Ukraine War, which will not result in a clear victory for either side but will prevent Russia from dismantling Ukraine as an independent state and liquidating its political leadership. While the truce will not resolve the conflict’s underlying causes or ensure Ukraine’s medium-term safety, it will provide both sides time to regroup and rearm, help Ukraine conserve manpower, and alleviate pressure on its damaged energy grid.
5. Likely Collapse of Iranian Regime. Greymantle estimates an 80% chance of the Iranian regime collapsing in 2025, up from 40% the previous year, due to increasing internal dissent and external pressures such as Israeli military actions supported by the U.S. and Jordan. Economic sanctions from the U.S. are depleting the regime’s dollar reserves, alongside intensified Israeli operations targeting key political and military figures, including Ayatollah Khamenei. We expect this combination to lead to a coup or uprising, marking a significant shift in governance after 46 years, with the regime facing downfall around March-April 2025.
6. Political Crisis in Germany. February’s German elections will result in a hung parliament, with parties unable to form a governing coalition for months. The far-right Alternative fur Deutschland (AfD) will solidify its position as the second or third-largest political party in Germany, stoking increased social unrest and political uncertainty in Europe’s largest economy.
7. Putin’s Rule in Jeopardy. Vladimir Putin’s hold on power could end in 2025, with a 55% likelihood of his overthrow. While a negotiated armistice in Ukraine will allow him to claim a hollow victory over NATO and the West, Russia’s broader military failures in Ukraine, the Middle East and Africa, domestic economic woes that include double digit inflation, and the loss of key foreign allies such as Syria and potentially Iran, are likely to lead to a palace coup by disgruntled members of his inner circle, aided by second level government officials miffed at being cut out of the most lucrative sources of official graft.
8. Renewed Hostilities in Yemen. With the Iranian regime weakened and Israeli military actions decreasing, Saudi Arabia and/or Egypt are likely to act against the Houthi rebels in Yemen, their common enemy. The rerouting of Red Sea shipping has significantly impacted Egyptian revenues, which rely on fees from vessels using the Suez Canal. The Saudis harbor resentment towards the Houthis for previous attacks on their oil facilities, and under intensified military pressure from Egypt, Israel, and Saudi Arabia, the Houthis will likely find their capacity to disrupt shipping diminished, compelling them to negotiate with regional powers.
9. A New Era for Middle East Cooperation The short-term resolution of Israel’s conflicts with Hamas, Hezbollah, and Iran will pave the way for closer ties between Israel and the Arab nations who are signatories to the Abraham Accords, which will receive vigorous new attention under a second Trump presidential term. Enhanced Israeli and U.S. partnerships with non-Hezbollah factions in Lebanon (the Druze, in particular) and a post-Islamist Iran are likely to substantially reshape the region’s geopolitics.
10. Rising Tensions Between Turkey and Israel The newfound cooperation in the Middle East will come with a cost: rising competition between Turkey and Israel. With a new government in Iran potentially aligning with Israel, Turkey’s ambitions in the region will clash with this emerging order, principally in Syria. Arab states will maneuver to exploit these tensions to their advantage. Turkey’s President Erdogan is patiently playing a long game against other regional powers, however, so expect these new tensions to persist.
Other Developments to Watch
- Expulsions and Forced Returns: 2025 will see the term “expulsions” enter mainstream discourse. From Palestinians in Gaza to Muslim minorities in Europe and Southeast Asia to Hindus in Bangladesh, the year 2025 could mark the beginning of a politically sanctioned wave of population movements.
- China and Taiwan: While it remains uncertain whether China will act against Taiwan in 2025, tensions will escalate if U.S.-China economic decoupling intensifies, as some of Trump’s senior aides such as Peter Navarro and Robert Lighthizer appear intent on bringing about. A blockade or invasion of Taiwan could become a reality if Beijing feels cornered.
Other Topics We’ll Cover in 2025
In addition to tracking these major developments, Greymantle will explore the following themes and stories:
- Chinese Military Strategy: We’ll delve into the practical mechanics of a Chinese military blockade of Taiwan, analyzing Chinese and U.S. naval and air power capabilities.
- Campus Protests and Radicalism: Comparing the pro-Palestinian protests of 2024 with the radical student movements of 1969, with a particular focus on Columbia University.
- The Fertility Crisis: Examining technological solutions to declining birth rates, such as artificial wombs, gene therapy and extending female fertility through artificial ova, and their social implications.
- Cultural Trends in Horror Films: Analyzing the recent surge in exorcism-themed horror films and what it says about society’s fears and anxieties in a secular age.
- The Development and Global Spread of Wokeness: Charting the ideological roots of ‘wokeness’ among fringe writers and American college campuses in the 1980s and 1990s and the subsequent diffusion of wokeness from the U.S. to Europe and Asia.
- The Rise of ‘Sinisterianism’: Investigating the cultural fascination with occult and Satanic imagery in music, fashion, and literature as a particular subset of the phenomena known as ‘occulture’.
- Artificial Intelligence Risks: Highlighting lesser-known incidents involving AI development and their potential dangers, including several little-known near misses in the U.S. and Germany.
- The Prospects for Third Parties in the U.S.: Evaluating the Forward Party, Green Party, and the No Labels movement, with a focus on their ability to win state and local elections.
- Underlying Social Drivers of Populism in America. Analyzing the reasons for the Trump and broader GOP victory in the 2024 U.S. elections through the prism of a reaction to progressive overreach, the rising cost of living, and the collapse of a shared sense of social reality.
As always, Greymantle will aim to provide thoughtful, in-depth analysis of these issues, cutting through the noise to offer a clear-eyed view of what lies ahead. Stay tuned for more in 2025.
We’re looking forward to it,
Greymantle
