Ten Surprises of 2025: A Look Back

By Brian Broberg | January 2, 2025

Executive Summary

2025 was a year defined by acceleration — in geopolitics, markets, technology, and the narrowing distance between intention and action. My Ten Surprises for the year were never meant as predictions, but as vantage‑points: signals on the horizon that seemed more probable than consensus assumed. Looking back, several themes emerged with clarity.

At the start of last year, I offered ten surprises for 2025. Some readers jokingly cast me as a suburban Nostradamus, but there’s no prophecy here — no quatrains, no crystal ball, no robes. I don’t predict the future. I simply try to notice what’s coming before the rest of the world has had its coffee.

This exercise has always been less about prediction and more about posture. I’m not a mystic; I’m a sentinel — someone who watches the horizon and calls out what he sees. Sometimes it’s a real signal, sometimes a false alarm, and occasionally a squirrel that looked more ominous than it was. The point is vigilance, not clairvoyance.

Let’s also remember what a “surprise” is. It’s simply an event most investors see as unlikely, but that I judge to be more probable. The point isn’t to be right or contrarian. It’s to widen our field of vision and stay attentive to what might be coming.

So, as I look back on the ten surprises I named for 2025, which can be found here, my goal isn’t to tally hits and misses like some kind of prediction scoreboard. It’s to learn — to see where attentiveness served us well, where assumptions needed refining, and how the year managed to surprise me right back. Let’s review ten surprises from three different categories.

Geopolitical

Surprise #1 suggested that Donald Trump would likely attempt to negotiate a settlement between Russia and Ukraine and that the war might finally move toward an end. I also noted he wouldn’t achieve it in the “24 hours” he promised. I never explicitly said the war would conclude in 2025, but I certainly implied momentum toward resolution. What I failed to account for was Churchill’s hard-earned warning: “Dictators ride to and fro upon tigers which they dare not dismount.” The implication is obvious—Putin cannot easily step off the forces he has unleashed, and therefore any negotiation he enters is constrained by the tiger he rides. Even when President Trump initiated talks, neither side accepted the terms. Discussions have continued, including the December 28th, 2025 meeting with President Zelensky at Mar‑a‑Lago, but whatever framework emerges still requires Putin’s assent. And as Churchill also reminded us, “An appeaser is one who feeds a crocodile, hoping it will eat him last.” Until the Kremlin believes continued war is more dangerous than compromise, the prospects for a genuine settlement remain limited. I’ll return to this dynamic in my forthcoming Ten Surprises for 2026.

The Second Surprise of the year involved Trump’s attempt at what I had described last January as a “Nixon‑style” maneuver: using economic leverage to loosen the China–Russia partnership. The logic behind that expectation still holds: China’s economy was slowing, Russia was becoming a strategic burden for Beijing, and Trump had both the appetite and the tools to force a recalibration. Some of that dynamic did unfold, though in a more modest and transactional form than the sweeping realignment I originally envisioned.

Trump sharply escalated tariffs early in the year, pushing average rates to levels not seen in decades. China responded in kind, and tensions rose. The turning point came later, during a bilateral meeting in South Korea on October 30, which was the first face‑to‑face Trump–Xi encounter since 2019. There, the two leaders agreed to a one‑year pause on China’s rare‑earth export controls, and Trump reduced certain tariffs, including the so‑called fentanyl tariff. China also committed to resume purchases of U.S. soybeans and energy and to curb exports of fentanyl‑related chemical inputs.

This was not a geopolitical realignment. There was no “hands‑off Taiwan” understanding, and China continued military exercises around the island. Nor did Beijing visibly distance itself from Moscow. But the meeting did produce a tactical easing of tensions: China gained economic breathing room, the U.S. secured rare‑earth stability, and both sides stepped back from escalation.

If there is a Nixonian echo here, it is faint. It proved to be less strategic pivot, and more like temporary accommodation. Whether this creates any real daylight between China and Russia is a question for 2026.

The Third Surprise anticipated that Israel, having already dismantled the leadership structures of Hamas and Hezbollah, would turn its attention to Iran’s senior ranks. In fact, I framed an idea of how that might work in an article I wrote in October 2024, entitled Dances with Wolves: Israel and Iran Part V. Israel demonstrated that capability in June 2025. Their opening strike on June 13 hit senior Iranian military commanders, key nuclear scientists, and several critical air‑defense nodes — a remarkable display of reach and precision. What they did not do was topple the regime itself. That restraint was almost certainly shaped by U.S. limits on how far Israel could go, which set the stage for what followed.

The Fourth Surprise argued that Israel would move directly against Iran’s nuclear program. That is exactly what unfolded, though not by Israel alone. After Israel’s initial strikes degraded Iran’s defenses, the United States executed Operation Midnight Hammer on June 22. Using B‑2 Spirit bombers and deep‑penetration munitions, the U.S. hit three of Iran’s most significant nuclear facilities, including Fordow and Natanz. Israel opened the door; the U.S. walked through it. The combined effect was a severe setback to Iran’s nuclear ambitions — the most consequential strike on Iran’s program in its history.

Iran remains defiant, but the program it once relied on is now in ruins. The regime survived, but its strategic posture did not. In the end, the sequence played out differently than I imagined, yet the core dynamic held: Israel paved the way, and the United States delivered the decisive blow.

Influences and Elections

The Fifth Surprise anticipated that Canadian and European electorates would shift rightward — not necessarily toward hard‑right parties, but away from the progressive and identity‑driven politics that had dominated the previous decade. That broad movement did occur, though the specific outcomes varied by country.

In Canada, the shift was unmistakable. Justin Trudeau stepped down after more than a decade in power, and Mark Carney — a business‑oriented “Blue Grit” Liberal, roughly the Canadian equivalent of a Blue Dog Democrat in the United States — led the party to a renewed mandate. It wasn’t a conservative revolution, but it was a clear move toward the center‑right within Canada’s political spectrum.

France took an unexpected turn. Marine Le Pen entered the year as the frontrunner, but her March 31 conviction for embezzlement removed her from contention and barred her from office for five years. That development reshaped French politics overnight — a genuine surprise that no one foresaw.

Germany moved rightward but stopped short of the outcome I anticipated. The nationalist Alternative for Germany party achieved its strongest result ever, finishing a close second in the national vote. The traditional center‑right bloc — the political family once led by Helmut Kohl and Angela Merkel — held onto first place by a narrow margin. The electorate clearly rejected the left‑leaning policies of recent years, but not enough to hand the nationalist party a plurality.

The United Kingdom delivered the most complicated picture. Reform UK, a populist, anti‑establishment party led by Nigel Farage, dominated local elections throughout 2025, winning more council seats than any other party. The Labour Party, facing the prospect of further losses, postponed or delayed multiple local and mayoral elections — a move widely criticized as an attempt to blunt Reform’s momentum. The rightward pressure is real, even if the general election has not yet been called.

Taken together, these outcomes confirm the broader trend: electorates across the West are moving away from progressive governance and toward more centrist or right‑leaning alternatives. The direction was right; the details were more varied.

The Sixth Surprise suggested that several political factions around the world would continue to lose influence and seats at the table. That pattern largely held.

Neoconservatives: Their influence in Washington diminished sharply. Before the inauguration, many expected former Secretary of State Mike Pompeo to return in a senior national‑security role. He is not a neoconservative, but at the last minute, he was castigated as being so. Personally, I admired his memoir, Never Give an Inch, and was struck by the stories he told from his time at the State Department in the first Trump administration. I was so impressed that I even wrote him a letter offering to serve if he returned to government — a long shot, certainly, but one I would have regretted not taking. Rival military schools aside, I respect the man. Yet the new administration signaled a clear break from the interventionist posture of the past two decades, and the supposed hawkish voices were sidelined.

Progressives: I anticipated a broader repudiation of class‑based identity politics, and that shift did occur. Institutions across the West scaled back DEI‑style structures, and public sentiment moved toward national strength and a return to common‑sense governance. Europe reflected the same trend: after years of condemning Russia while still buying its energy products, the continent is now preparing to purchase American natural gas and has committed to a €500 billion defense fund. It marks a genuine change in mood — some call it a “vibe shift.”

Extremist fringes: I wrote that the loudest and most polarizing factions within each party would lose influence. That was broadly true — except, perhaps, in New York City, where political gravity continues to operate on its own terms. In most other places, voters signaled exhaustion with ideological excess and rewarded candidates who offered stability and competence.

Taken together, these shifts confirm the broader pattern: electorates across the West are moving away from ideological maximalism and toward more grounded, pragmatic leadership — even with the volume turned up in Washington.

Markets and Economics

Surprise #7 challenged the conventional wisdom that two strong years in the markets must be followed by a lackluster one. I argued instead that fundamentals still matter most — economic growth, corporate profitability, and the visibility of both. Despite an aggressive policy agenda, a record number of initiatives, and a tariff regime far more expansive than anyone expected, those fundamentals held.

I suggested the S&P 500 would finish the year between 6,500 and 7,100. It closed at 6,845, just above the midpoint of that range, delivering a 16% gain for the year. The index reached its peak the day after Christmas at 6,945. Not only was it a positive year — it was the third consecutive year of double‑digit gains, something that has happened only a handful of times since the 1940s.

In short, the “rule of thumb” failed, and the fundamentals won.

Surprise #8 anticipated that 2025 would be a positive year for markets but a choppy one — that “10% corrections may occur more often than normal.” That turned out to be exactly right. I tied the expected volatility to uncertainty around budget deficits, the new Department of Government Efficiency, defense spending, tariffs, and the progress of peace negotiations in Israel and Ukraine.

What no one foresaw was how aggressive the tariff regime would be. The initial announcement triggered a sharp sell‑off, which was amplified by the market’s reaction to DeepSeek’s AI results — a reminder that volatility now comes from both Washington and Shenzhen. The combination pushed the NASDAQ into a full correction in early March, and at one point into a brief bear market. The S&P 500 came close to the same threshold.

Then, in classic fashion, President Trump eased the pressure a week later by announcing a ninety‑day moratorium on the tariff plan, giving his team room to negotiate trade deals. Markets stabilized, and the NASDAQ even experienced another 10% correction in November before rallying into year‑end.

In sum, we had two significant corrections — exactly the pattern I expected. The year was volatile, but not unusually so. It was simply a reminder that markets can rise strongly and still take a jagged path to get there.

The Ninth Surprise focused on inflation and what that would mean for Federal Reserve policy. Inflation had been stuck near 3% for most of the year — roughly 50% above the Fed’s 2% target — and I expected that would keep the Fed from cutting rates in 2025. For about eight and a half months, that surprise held firm. Then, beginning in mid‑September, the Fed cut rates three times by a quarter point each, despite inflation still running above target and despite internal divisions among policymakers about whether cuts were appropriate. And to think they didn’t even call me before pulling the trigger.

Why did they cut? The most likely reason is concern about the labor market. Job growth has been slowing, even though headline employment reports remain steady. Fed minutes show that officials saw fewer risks that tariffs would drive up inflation, and more risks that the labor market could deteriorate if rates stayed too high. That’s surprising to many, given the widespread belief that tariffs would be inflationary and job‑destroying. Yet the data told a different story: the latest monthly inflation reading was expected to come in at 3.1% but instead landed at 2.7%.

Another possible reason is housing affordability. By lowering the price of money, the Fed may be trying to help prospective homebuyers. I’m not convinced it will work. If borrowing gets cheaper, home prices tend to rise — as we saw during the COVID‑19 shutdowns. But again, I’m just a sentinel, standing my post. It’s also possible the Fed sees early signs of disinflation, or even deflation, and is trying to get ahead of it. I’ll explore that possibility more fully in Ten Surprises for 2026.

Surprise #10 anticipated another semiconductor shortage driven by the explosive growth of artificial intelligence. That surprise proved accurate. The world did experience a targeted and persistent shortage of advanced chips, driven by surging demand for high‑performance AI accelerators and limited global capacity to manufacture them. Industry reports throughout the year described AI companies absorbing enormous volumes of memory and compute resources, leaving smartphone, PC, and consumer‑electronics manufacturers facing tighter supply and rising costs.

The constraints were structural as well as cyclical. Global capacity for cutting‑edge chipmaking remained limited, and the talent pipeline for semiconductor engineering continued to lag demand. Geopolitical tensions and tariff regimes hardened supply‑chain divisions, further complicating access to advanced nodes. Even where new fabrication plants were planned, progress was slowed by labor shortages, regulatory reviews, water‑use restrictions, and, in some regions, insufficient power infrastructure to support new data centers.

Despite these pressures, AI‑oriented chipmakers posted record sales, and demand for high‑end processors continued to outstrip supply. The shortage was not as broad as the pandemic‑era crunch, but it was every bit as consequential for the sectors that rely on advanced compute.

In short, the AI boom created exactly the kind of targeted semiconductor shortage I expected. It is a reminder that the world’s appetite for compute is growing faster than its ability to manufacture it.

A Short Reflection

One of the quiet lessons of 2025 was the shrinking runway between geopolitical intention and geopolitical action. Patterns were visible, but the timing was deliberately obscured. The year reminded me that foresight is often about recognizing trajectories rather than predicting clocks. The early‑January US operation in Venezuela only underscored this: analysts could see the shape of what was coming, but not the speed with which it would arrive.

As I close the book on 2025’s surprises, I’m reminded that the work of watching is never finished. Each year brings its own mix of clarity and confusion, signals and noise, and the discipline is simply to keep paying attention. The value of this exercise isn’t in getting everything right, but in learning to see a little more clearly than before. So, with gratitude for what the past year has taught me, with a renewed commitment to the quiet craft of vigilance, I now turn toward the horizon again.

Of course, I’m always open to comments, questions, or other musings. Please feel free to write to me at brian@broberginvestmentgroup.com .

Wishing you and yours a wonderful 2026!