With Donald Trump returning to the White House and global turmoil persisting elsewhere, 2025 looks set to be another blockbuster year for financial markets.
Every year, online investment and trading platform Saxo Bank posts its ‘outrageous predictions’ for the following year. This is a series of events that, while highly unlikely, ‘could just happen’.
‘The Saxo Outrageous Predictions are not exactly news and not exactly real—at least not yet’, Saxo’s chief macro strategist, John Hardy, said.
He added: ‘While we don’t know which stories will drive the global economy in the coming year, our 2025 predictions, from Nvidia trouncing its Mag 7 peers to the fall of OPEC, from a bold bet on reflation in China to a great leap forward in biotech, are just as promised: outrageous.’
Saxo’s latest ‘Outrageous Predictions’ include musings on the impact of Trump’s policies on the US dollar, artificial hearts, the future of OPEC and the strength of sterling.
These eight predictions aren’t official forecasts, but they are intended to spark discussion, particularly as the truth often ends up being stranger than fiction.
What is ahead? Donald Trump will be returning to the White House in 2025
1. Trump 2.0 ‘blows up’ the US dollar
‘If Trump 1.0 was the warm-up act for deglobalisation, Trump 2.0 will prove the main event, with all of its consequences for the US dollar’, Saxo’s annual Outrageous Predictions series suggests.
Amid sky-high tariffs on imports and deficit reductions spearheaded by Elon Musk, the US dollar looks set to come under severe pressure in 2025.
According to Saxo’s Outrageous Predictions: ‘The implications for the US dollar are dire for trade around the world, as it cuts off the needed supply of dollars to keep the wheels of the global USD system turning, ironically risking a powerful spike higher in the US dollar.
‘Instead, safety valves are found, as global financial actors scramble for alternatives.’
In terms of the impact of the decline in the US dollar, Saxo said: ‘The crypto market quadruples to more than $10trillion, the US dollar falls 20 per cent against major currencies and 30 per cent versus gold.
‘The US economy continues to reflate, but wages keep up with goods inflation, as production resources reshore to the US.’
2. Nvidia inflates to twice the size of Apple
Saxo’s Outrageous Predictions also claim that Nvidia’s success could be ‘supercharged’ with the availability in volume of its revolutionary 208-billion transistor Blackwell chip.
‘With the intensifying AI arms race as no giant or even government wants to be left behind, and as AI data centre electricity costs have soared, the insatiable demand for the more powerful and yet less power-hungry Blackwell chips sees Nvidia taking the crown as the most profitable company of all time’, the predictions claim.
Nvidia shares could end up trading ‘well north’ of $250, before the market begins to question its potential to grab an ever-greater share of corporate profits, and regulatory scrutiny tempers the outlook.
Nvidia shares are currently trading at around $138.63.
3. China unleashes $7trn stimulus to reflate economy
Millions of consumers and investors are waiting to see how the authorities in China will respond to the country’s ongoing economic woes.
The country has powered the world’s growth over the past couple of decades, with China typically representing a third of global GDP growth annually.
But today, China’s economy is in the midst of a marked slowdown as its property sector teeters under a vast debt pile and consumers rein in their spending. There are also mounting political tensions with the West.
In its Outrageous Predictions series, Saxo suggests China’s government could unleash fiscal initiatives of over $7trillion in 2025 and future years.
The experts predict: ‘Much of the spending goes directly into consumers’ pockets via e-CNY digital currency, so that it will be injected straight into the economy rather than to pay off debt.
‘China also adds heavy doses of social engineering in its stimulus, incentivising companies to reduce working hours to improve quality of life. This boosts leisure time, consumption, company formation, family formation and childbearing.’
The measures could lead to a ‘strong reflationary impact’ in China and beyond, as well as higher commodity prices, Saxo said.
4. First bio-printed heart ushered in
In another outlandish prediction, next year scientists will successfully bio-print a human heart, promising to extend the lives of millions of people.
‘The implications of this achievement are monumental’, experts behind Saxo’s Outrageous Predictions series claimed.
They added: ‘It promises to alleviate the global shortage of donor organs by providing bio-printed hearts tailored to the DNA of individual patients, thus reducing the risk of rejection.
‘This breakthrough paves the way for extending human longevity by replacing failing organs with custom-made, fully compatible ones.’
In terms of the market impact of this development, Saxo said: ‘The success in bio-printed organs sees growth expectations jump for the biotechnology and 3D printing sectors.
‘Most companies in this space are in the start-up phase, but watch for a rash of IPOs in the space.
‘More generally, this surge in innovation and investment could reshape the healthcare industry, leading to improved patient outcomes and significant economic growth.’
5. Electrification boom ends OPEC
Electric vehicle production and adoption levels have been hot topics this year.
Fears are mounting about rising job losses as car makers struggle to meet binding EV sales targets, which require more than a fifth of all sales by mainstream manufacturers to be EVs this year.
Business Secretary Jonathan Reynolds signalled an overhaul to EV policies after Vauxhall announced plans to close its van-making factory in Luton.
Stellantis, which also owns Citroen, Peugeot and Fiat, said it would combine production at its other plant in Ellesmere Port.
Saxo’s Outrageous Predictions suggest: ‘In 2025, with the writing on the wall on the forward demand picture since two-thirds of oil ends up as gasoline or diesel in cars and trucks, OPEC finds its relevance shrinking further and its multi-million barrel per day production limits irrelevant.
‘With some members already cheating production quotas to grab what income they can and export demand falling, a majority of members quickly realise the jig is up.’
If this occurs, the price of crude oil would plummet, offering a boon for airlines, chemical, paint and tire manufacturers and freight and logistics companies. However, the market ‘balances quickly’, according to the predictions.
Current OPEC members include Algeria, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela.
6. US imposes AI data centre tax
‘With technology giants sucking up power supplies for their new artificial intelligence data centres, utility bills skyrocket and an outraged public demands action’, Saxo predicts.
Some local authorities could slap hefty taxes or fines on the largest data centres in a bid to subsidise lower power prices for households.
Saxo’s Outrageous Predictions claim: ‘The taxes incentivise investment in massive new solar farms with load balancing battery packs, but also dozens of new natural gas-driven power stations, even as the demand for ever more power continues to rise faster than supply. Rising power prices drive a new inflationary impulse.’
The predictions suggest a ‘massive boom’ in US investment in power infrastructure could be on the cards.
Saxo experts said: ‘Companies like Fluor rise on signing massive new construction deals. Tesla’s accelerating Megapack gets increasing attention. Long-term US natural gas prices more than double, a significant contributor to a more inflationary outlook.’
7. Natural disaster bankrupts large insurance company
‘After a year of wild weather in 2024, a catastrophic storm hits the US in 2025, sinking a large insurer that has underestimated climate change risks’, John Hardy, Saxo’s chief macro strategist said in the firm’s Outrageous Predictions series.
He added: ‘In 2025, a catastrophic storm and rainfall event in the US catches the insurance industry unprepared, inflicting damage stretching into many multiples of the $40billion in claims linked to Hurricane Katrina in 2005.
‘One of the largest US insurers significantly underestimated the insurance risks from climate change, leading to underpriced policies in the affected region. With insufficient reserves to cover claims and inadequate reinsurance to mitigate the costs of this extreme event, panic spreads across the entire industry.
‘The disaster forces a reset in natural disaster pricing, profoundly marking down real estate values in many housing markets. Consumer confidence takes a hit on the insecurity of the value of many homeowners’ largest asset, their house.’
This, the predictions claim, could lead to the collapse of a major insurer, but in turn see Berkshire Hathaway shares rise as Warren Buffet’s firm gains market share and has adequate capital to weather the storm.
8. Sterling erases post-Brexit discount against euro
Feeling optimistic? Prime Minister Keir Starmer and chancellor Rachel Reeves
In its final Outrageous Prediction for 2025, Saxo said that while Europe’s economy flounders, fresh fiscal policies help drive sterling back to levels against the euro not seen before Brexit.
Saxo experts said: ‘By cutting unproductive subsidies like winter fuel aid for pensioners, encouraging investment in the property and manufacturing sectors and raising incomes for public sector workers, the UK is primed for solid nominal growth in the years ahead, keeping the Bank of England policy rate at a high level compared to major global peers.
‘On the European continent, the situation couldn’t be more different. France has a dysfunctional government that is mired in a five-year exercise of getting its out-of-control budgets in order.’
Meanwhile, Germany remains ‘the sickest of the sick in Europe’, the experts claimed.
In Britain next year, however, sterling could rise to €1.27 against the euro, reaching the level it traded ahead of the Brexit referendum and ‘erasing its entire post-Brexit vote discount.’
Saxo said: ‘Encouraging domestic investment and a more robust growth outlook support sterling versus the flailing euro, seeing the Euro/Sterling rate fall as low as 0.7500, below the rate the day before the Brexit vote at 0.76. The UK FTSE 100 posts a strong performance.’
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