For most of 2025, financial markets have been marked by persistent volatility driven by a mix of tariff concerns, geopolitical tensions and uncertain monetary policy. Meanwhile, the Federal Reserve has found itself with a dilemma. On one hand, inflation has remained stubbornly above the 2% target. This stubborn inflation, when combined with fears that tariffs and other policies will raise inflation further, makes the argument for keeping interest rates steady. On the other hand, signs that the labour market is weakening and concerns about slower economic growth overall make the argument for lowering rates.
So far, the ‘Fed’ has held rates steady through mid-year, but expectations for two rate cuts later in 2025 have fluctuated amid evolving data and policy signals, with the soonest potentially coming mid-September. With all of this in mind, we’re now turning our attention to the trends and signals that could shape the final stretch of the year, from rate decisions and consumer sentiment to sector-specific momentum.
To gain an expert insight into the U.S. economy, Digital Journal spoke with David Stratton, Regional Banking Executive, BOK Financial on the state of the economy and what we should expect to see for the remainder of the year.
Digital Journal: What banking industry trends are you expecting to see in the remainder of the year?
David Stratton: This year has definitely been a volatile one for the U.S. markets, but there are a few trends we expect to see as we approach the final stretch of 2025.
We expect to see improved loan growth, particularly in our markets in the Southwestern region of the country, which remain among the most vibrant in the U.S. economy. A clearer outlook on tax policy, most notably the passage of the One Big Beautiful Bill Act, removes a significant source of uncertainty and supports continued expansion. Likewise, as company earnings have remained relatively strong for the first two quarters, expectations around tariff-related impacts have eased.
DJ: Are you seeing any credit challenges as a result of increased tariffs?
Stratton: Due in part to our geographic footprint and the diversity of industries represented, our clients continue to be resilient, and our credit quality remains very strong. Certainly, there are clients who have greater exposure to the tariffs but, to date, impacts have been tempered for the most part. However, I think it’s probably still a little too early to tell how tariffs will impact those companies who have a heavy reliance on importing. I think many companies are just looking for clarity so they can adapt and run their businesses based on the new set of rules. Uncertainty creates headwinds.
DJ: What is your outlook for loan growth for the rest of 2025, particularly for C&I lending?
Stratton: We think loan growth will persist for the remainder of 2025 despite some companies seeking greater trade clarity. Banks are very hungry for loan growth right now. Much of this demand is the result of some banks pulling back in 2023 and early 2024 and are now trying to play catch up on growth. Thankfully, our strong capital and liquidity were on full display which allowed us to stay consistent in our approach and accelerate loan growth during that time. Ultimately, C&I lending has always been centered on strong, deep-rooted relationships and we think that will continue as companies value consistent bank partners through different economic cycles.
DJ: Are there certain areas or geographies where you see the highest growth opportunities?
Stratton: We think we are as well-positioned as any regional bank in terms of our footprint. Serving the middle of the U.S. and the Southwest is an advantage as it reduces our exposure to significant economic highs and lows that are more pronounced on the coasts.
Throughout the last couple of years, we have seen much of our growth centered in Texas and Oklahoma, where our brands are very strong. However, we have also made tremendous investments outside of Oklahoma and Texas, leading us to be very bullish in places like Arizona, Colorado and the Kansas City metro area.
Additionally, we have continued to invest in many specialized businesses such as asset-based lending (ABL), Native American, dealer finance, and mortgage finance. Many of those businesses are seeing double-digit loan growth and we expect robust growth to continue. Some of these businesses are still relatively young in their lifecycle for our bank versus our more established areas like energy, commercial real estate and healthcare. As a result, we are bullish on growth as we look ahead.
