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Former Wall Street money manager and financial analyst Edward Dowd of Phinance Technologies has issued a dire warning that a deep global recession is set to hit in 2025, with a deflationary crisis that could force the Federal Reserve into emergency rate cuts.
In an exclusive interview with USA Watchdog, Dowd outlined the economic storm on the horizon, pointing to collapsing real estate markets, a faltering economy, and misguided Fed policies as key drivers.
“We think shelter is going to trend lower, and there is going to be a deflationary scare coming,” Dowd said, predicting that falling commercial and residential real estate prices will drag the economy down. “I think [the Fed] freak out in the fall in October or November.”
He expects the stock market to take “big hits” as the Fed scrambles to respond with drastic rate cuts.
Dowd’s 2025 forecast builds on earlier warnings he issued throughout 2024 and early 2025.
In February 2025, he told USAWatchdog.com, “We are seeing a recession in 2025. The rest of the globe is already starting to roll over… The economy for the middle-class is going down.”
He highlighted an 18-year housing cycle, noting that 2025 marks the next downturn since the 2007 crash.
In December 2024, Dowd exposed how the Biden administration propped up a failing economy with “crisis-level spending” and fraudulent job data, stating, “They were padding the non-farm payroll numbers to the tune of 1.25 million jobs… The price tag is coming due in 2025.”
The analyst points to specific economic indicators already signaling trouble.
“Airlines have taken out previous lows, homebuilders are weak, the Dow Jones transports are not close to all-time highs. The real economy is rolling over,” Dowd said in the recent interview. He also referenced Warren Buffett’s $350 billion cash hoard as a red flag, noting, “Buffett is telling you everything you need to know about this market.”
Dowd’s outlook includes a sharp critique of Fed Chairman Jerome Powell, whom he accuses of misreading the impact of tariffs.
“Chairman Powell is dead-ass wrong. Tariffs are actually deflationary, and he’s holding rates higher for longer,” Dowd stated. He argues that Powell’s high-rate stance will exacerbate the coming downturn, forcing the Fed into a reactive panic.
Immigration policies under the Biden administration, costing an estimated $500 billion to $2 trillion, have also distorted the economy, according to Dowd. With President Trump’s border security measures reversing these policies, Dowd predicts an oversupply of housing that will accelerate price declines.
“Prices have already started coming down in certain regions, and that is going to accelerate,” he warned.
Amid the turmoil, Dowd sees gold as a critical safe haven.
“Gold is money good,” he declared, noting that big banks now treat it as a Tier 1 asset, enabling them to create loans against it.
“Gold is good long term,” he added in a February 2025 interview, urging investors to secure their wealth against the coming storm.
Dowd’s earlier forecasts have consistently warned of systemic fragility.
“The economy is going to take a nosedive sometime in the next 12 months… There is going to come a time in the next 6 to 12 months this huge shock that we saw in the 2008 financial crisis,” he told USA Watchdog in May of 2024.
He also flagged commercial real estate as a ticking time bomb, stating in March 2025, “The housing market was on fragile ground… It was held up by illegal immigrants supporting rent prices. So, as that unwinds, we think there will be a mini 2008–2009 housing issue.”
As the Trump administration faces what Dowd calls a “perfect storm,” he remains skeptical of a quick recovery.
“There is no way to avoid the pain,” he told USA Watchdog in February 2025, likening the situation to Reagan’s first term. However, he suggested that Trump’s policies, if enacted swiftly, could pave the way for a rebound.
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