Cathie Wood, the head of ARK Invest, is forecasting a significant economic upswing for the US in the latter half of 2025. She believes the current economic slowdown is the final phase of a “rolling recession,” paving the way for a period of strong growth.
What is a Rolling Recession?
A rolling recession isn’t a full-blown recession affecting the entire economy at once. Instead, different sectors experience downturns and recoveries at different times.
Wood’s Predictions
Wood shared her outlook with her 1.7 million X followers and during an interview at Bitcoin Investor Week. She argues that the market is currently underestimating the positive impact of the end of this rolling recession. This, she says, will give the government and the Federal Reserve more leeway than investors expect.
She predicts a “deflationary boom” later this year, fueled by a potential tax cut. Wood believes that a tax cut would alleviate market uncertainty and stimulate productivity. She elaborated: “If Congress cuts taxes, that would remove a major source of uncertainty. We could see a booming economy with lower-than-expected inflation.”
The Path to a Boom
Wood points to the current economic situation: housing, auto sales, capital spending, and small businesses have all been hit hard. Even high-income earners are feeling the pinch. She believes this widespread slowdown is clearing the way for a substantial increase in productivity. Increased productivity, along with a stronger dollar, are key factors in combating inflation, she added. She concluded by stating that the eventual drop in inflation might be surprisingly significant.
