Trump's proposed policies are forecasted to escalate inflation
Date
6/26/2024 8:09:00 AM
(MENAFN) Moody's Analytics, a prominent entity in Warren Buffett's investment portfolio through Berkshire Hathaway, has released a report projecting significant economic implications should former President Donald trump return to office alongside a Republican-controlled Congress. The New York-based rating agency's June analysis delves into the macroeconomic consequences of policy proposals by United States presidential candidates, particularly focusing on Trump's platform.
According to the report, Trump's proposed policies, which include heightened tariffs on all United States imports, tax cuts aimed at stimulating economic growth, and stricter regulation of illegal immigration to potentially tighten the labor market, are forecasted to escalate inflation from the current 3.3percent to 3.6percent by 2025. Moody's Analytics predicts that these measures could lead to a recession by mid-2025, with the economy growing at an average annual rate of 1.3percent during Trump's potential tenure.
In contrast, the analysis posits that a Joe Biden presidency would likely result in a more moderate economic trajectory. Under Biden's policies, including a scenario with a divided Congress (given a 40percent probability by Moody's), inflation is projected to remain stable, aligning closely with the United States Federal Reserve's 2percent target by the summer of 2025. Moody's further estimates that a Biden administration would preserve the baseline inflation forecast of 2.4percent for 2025.
Moody's Analytics also forecasts potential job losses and unemployment rates under each scenario, highlighting an anticipated reduction of 3.2 million jobs and a 4.5percent unemployment rate by the end of a Trump presidency. These projections underscore the agency's concerns over the economic ramifications of policy shifts depending on the outcome of the upcoming United States presidential election and congressional control.
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