The State of the Economy: Perspective
By: Thomas Sandgaard, CEO of Sandgaard Capital
The U.S. economy continues to capture headlines with a mix of resilience and uncertainty. For business leaders, investors, and households alike, 2025 has been defined by strong underlying growth tempered by persistent challenges. While the outlook remains mixed, clear themes are shaping the path forward.
Growth and Resilience
Despite ongoing global headwinds, the U.S. economy has demonstrated remarkable durability. Consumer spending remains the backbone of growth, supported by steady job creation, rising wages, and household balance sheets that, while tighter than in past years, remain relatively healthy.
Corporate earnings tell a more nuanced story. While sectors tied to discretionary spending and commercial real estate face pressure, industries such as technology, healthcare, defense, and energy continue to drive innovation and long-term investment opportunities. Businesses are adapting quickly, leveraging digital transformation, automation, and supply-chain resilience to protect margins and position themselves for growth.
Inflation and Interest Rates
Inflation has cooled from its peak but remains above the Federal Reserve’s target, keeping monetary policy tighter for longer. However, the balance is shifting: the Fed has begun easing, signaling a more supportive environment ahead.
On September 17, the Federal Reserve cut its benchmark interest rate by 25 basis points to a target range of 4.00%–4.25% — the first reduction since December. Policymakers signaled that two additional cuts are likely by the end of 2025, citing softer job growth and rising unemployment as key factors.
While this shift offers relief, it does not erase challenges:
Headwinds: Borrowing costs remain a significant weight on housing, commercial real estate, and capital-intensive industries. Consumer credit has also tightened, creating stress for households dependent on debt.
Opportunities: Gradual easing opens the door for refinancing and provides an important tailwind for sectors sensitive to rates. Investors with liquidity are also finding attractive entry points in dislocated assets, distressed credit, and industries where overleveraged competitors are forced to retrench.
This evolving environment favors disciplined capital deployment. Companies and investors who maintain flexibility in their balance sheets are well-positioned to capitalize as valuations adjust.
Market Volatility
Equity markets reflect the dual reality of uncertainty and optimism. On one hand, geopolitical risk, energy price swings, and election-year policy debates create meaningful volatility. On the other hand, corporate fundamentals remain steady, supported by productivity gains and resilient demand in key industries.
For long-term investors, volatility is not simply a challenge — it is an opportunity. Mispriced assets, undervalued companies, and sectors temporarily out of favor can all offer attractive entry points for those willing to look past short-term noise.
The Bigger Picture
At Sandgaard Capital, we view today’s economy through both a cautious and opportunistic lens. Elevated rates and shifting consumer dynamics demand prudence, but history reminds us that periods of uncertainty often produce the best investment opportunities.
Our strategy remains consistent:
Invest with discipline and patience.
Focus on long-term value over short-term speculation.
Identify opportunities others overlook — whether in private equity, real estate, or public markets.
Periods like these reward thoughtful investors who combine resilience with bold action.
Closing Thought
The state of the economy is never static — it is dynamic, shaped daily by policy, innovation, and global events. While headlines often emphasize risk, we see resilience, adaptability, and enduring opportunity. At Sandgaard Capital, we remain committed to building lasting value through every stage of the market cycle.