– U.S. economy in 2025 balances growth and low inflation, but Goldman Sachs warns of fragility amid three key risks.
– Stagflation, rate shocks, and dollar volatility threaten the “Goldilocks” scenario, limiting Fed flexibility and amplifying market instability.
– Eased financial conditions and overvalued equities (e.g., S&P 500’s Magnificent 7 dominance) signal potential corrections and sector rotation risks.
– Investors advised to prioritize defensive sectors (utilities, staples), gold, and inflation-hedging assets while diversifying geographically and hedging currency exposure.