We asked Chat GPT to give a list of global economic risk factors. Seems pretty on point to us: Any comments?
This is exactly whey we have developed our software - so we don't have to be concerned about things like this...
Broad Economic Commentary (as of July 2025)
Areas of concern
Below are bullet points of some of the underlying areas of concern regarding the global markets and potential inputs to a market crash
U.S. Fiscal Crisis (Jul 2025 – Apr 2026)
Total federal debt: Over $36 trillion
Debt-to-GDP ratio: >125%, far above historical norms
Interest payments: Now the largest single line item in the federal budget, surpassing military and Medicare spending
Trump’s administration is pushing aggressive tax cuts and tariffs, likely widening deficits. Bond market unease is already visible.
Watch for: Treasury auctions in Q3–Q4 2025 and potential government shutdown risk.
Tariff Trade Wars (Jul 2025 - )
The Trump tariffs will cause economic pain in many of its largest trading partners.
Potentially starting a major global economic downturn as tariffs become essentially embargos.
Increased tensions potentially causing Japan and China to sell off US bonds as a retaliatory weapon
Commercial Real Estate (CRE) Meltdown (Sep 2025 – Jun 2026)
Office vacancy and distressed property sales are climbing. Regional banks are bracing for Q4 write-downs.
Watch for: REIT bankruptcies and defaults in large U.S. cities.
Consumer Credit Crisis (Jul 2025 – Dec 2026)
Defaults on credit cards and auto loans are surging, especially among subprime borrowers. Layoffs in tech and retail are compounding stress.
Watch for: Rising charge-offs in Q3 earnings season.
Geopolitical Shock (Jul 2025 – Dec 2026)
Trump has taken a hawkish stance on Iran and China. Tensions in the Taiwan Strait and Red Sea could escalate quickly at any time
Watch for: Military posturing or flashpoints in Q4 2025.
Bond Market Liquidity Crisis (Jul 2025 – Jul 2026)
Yields remain elevated; if the Fed resumes tightening or cuts are delayed, liquidity could evaporate.
Watch for: Volatility in U.S. Treasury bid-to-cover ratios.
Central Bank Policy Error (Jul 2025 – Jun 2026)
Inflation is proving sticky, with core CPI still above 3%. Fed and ECB remain cautious.
Watch for: Policy divergence and market tantrums over missteps.
China Collapse Risk (Aug 2025 – Apr 2026)
Property sector remains in crisis. Youth unemployment is high, and stimulus is falling flat.
Watch for: Bank runs, regional bond defaults, or trust product failures.
AI Bubble Burst (Sep 2025 – Dec 2026)
AI stocks are priced for perfection. Any earnings disappointment could trigger rotation out of tech.
Watch for: Q3 tech earnings and insider selling.
Energy Price Spike (Jul 2025 – Jan 2026)
OPEC+ has extended production cuts. Any supply shock (hurricane, war) could spike prices into recession territory.
Watch for: Fall/Winter heating demand and shipping disruptions.
