Is 2025 the Next 1926? A Historic Bull Market Forecast

As we step into 2025, an extraordinary coalescence of important catalysts is shaping the economic and financial landscape. The parallels between today and the mid-1920s are striking, from fiscal policy and productivity gains to energy independence and market cycles. If history is any guide, investors may be about to experience one of the most dynamic market environments in a century—but not without a critical shakeout first.

Using advanced quantum computing models, I have analyzed a litany of economic and financial variables since mid-2020, revealing an astonishing month-by-month correlation with the market moves of the 1920s. The conclusion? 2025 is shaping up to be the modern equivalent of 1926, a pivotal year that saw short-term volatility followed by an explosive, multi-year bull market.

The 1920s Market Blueprint: Where We Are Now

The 1920s were defined by massive economic expansion, debt reduction, productivity gains, and fiscal conservatism. President Calvin Coolidge’s policies of budget cuts, tax reductions, and limited government intervention created an ideal environment for economic growth and stock market prosperity.

Fast-forward 100 years, and the U.S. is once again experiencing a similar backdrop. Spending cuts are taking center stage, energy production is surging, taxes are poised to decline, and productivity is reaching new highs thanks to technological advancements. Like the post-pandemic recovery of the 1920s, 2025 is being fueled by a resurgence in economic activity and capital investment.

A Shakeout Before the Breakout

While the long-term setup is overwhelmingly bullish, the first quarter of 2025 won’t be smooth sailing. Just as in 1926, the market is likely to undergo a sharp correction in February and March, potentially declining 10-11% from the start of the year.

This pullback will be fueled by fears over budget cuts, deficit reduction, and shifting capital flows, just as it was in the mid-1920s. The adjustment phase will likely last through early April, creating one of the last great buying opportunities before a historic rally begins.

But the turnaround will be swift. By mid-April, a massive market surge should take hold, mirroring the breakout that followed in 1926. April itself may post a modest 1-1.5% gain, but what comes next will be one of the strongest sustained uptrends in market history, with projected monthly gains of 5% or more for an extended period.

The Catalysts Fueling the 2025 Bull Run

Several key factors are aligning to create an exceptional investment opportunity, mirroring those that propelled the market higher in the mid-1920s.

Fiscal Policy & Deficit Reduction

Just as President Coolidge slashed government spending and tackled debt buildup, today’s economic policies are moving toward deficit reduction and fiscal discipline. Markets historically reward fiscal responsibility, and the reduction in government spending will increase long-term stability while easing inflationary pressures.

Oil Production and Energy Independence

In the 1920s, American oil production soared, driving down gas prices and fueling economic expansion. “Drill, baby, drill” is once again becoming a reality, as U.S. energy production ramps up, lowering costs and increasing profitability across industries. Energy production was a massive driver of prosperity in the 1920s, and it is set to be a major force again in 2025.

Technology and Productivity Boom

One of the most overlooked similarities between the 1920s and today is the impact of technological advancements on productivity. The modern equivalent of the industrial boom of the 1920s is today’s AI and quantum computing revolution. Businesses are becoming more efficient, supply chains are more resilient, and automation is transforming industries, all of which will drive corporate earnings higher.

Deflation and Purchasing Power

Despite the noise, inflation is coming under control and could even give way to mild deflation, mirroring conditions in the 1920s. With rising wages, increased productivity, and lower energy costs, consumers will have more purchasing power, further fueling economic growth and corporate profitability.

The Bond Market & Interest Rates

The 20-year Treasury bond is poised for a major rally, with yields likely retreating to 3.75% or lower. While bonds may offer a strong total return opportunity, equities are set to outperform by a wide margin, just as they did in the late 1920s. The temporary spike in long-term rates, driven by foreign capital shifts, is nearing its end. As money stabilizes, equity markets will explode higher.

Positioning for the Next Leg of the Rally

History tells us that 2025 may follow the same path as 1926—volatility early in the year, followed by an unstoppable bull market. Investors who recognize this setup have a rare opportunity to position themselves ahead of one of the greatest market expansions of our time.

For the first few months, expect a shakeout, with small and mid-cap stocks holding up better than large caps. Then, by mid-April, the market should begin an unrelenting move higher, leading to sustained 5% monthly gains for months to come.

Conclusion: A Once-in-a-Century Setup

The alignment of fiscal conservatism, rising energy production, technological advancements, and a global capital shift toward U.S. markets has created one of the most compelling investment opportunities in history. If 1926 was a launchpad for the greatest bull market of the 20th century, then 2025 is shaping up to be the same for the 21st.