Editor’s note: This is the final installment of an annual 4-part series on the trends impacting small and midsize businesses. Here, we study economic trends for 2025.

To project into the future, we must first understand the past. Much of the last year’s narrative has been about the Federal Reserve trying to cool inflation. Its root cause was certainly formulaic — part short-term reaction to supply chain shocks rooted in the pandemic, and some in the form of fiscal stimulus. The correlation between federal spending and the consumer price index is clear.

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