Trump’s Economics Are Anybody’s Guess. Here’s Bill Dudley's
Trump will take tariffs much higher than before — to at least 10% of aggregate imports, compared with 3% in his first term.
He’s genuinely a fan, seeing them as a great negotiating tool and income generator.
Trump will follow through on deportations, but I expect less rather than more. Ejecting millions of people from the US is logistically difficult.
A committed effort would take years, not months, and the resulting labor shortages would be too economically damaging.
Still, even a smaller number — say, focused on convicted criminals — will exacerbate a shortage of workers that is limiting growth.
Expect higher inflation, elevated interest rates, slower growth and more volatility as markets and the Fed struggle to adjust to Trump’s pronouncements and actions.
Bill Dudley Bloomberg 22 January 2025
Bill Dudley: I think r* is a lot higher than the Fed recognizes
There’s a strong case that r* has risen substantially. For one, the persistent strength of the US economy suggests that monetary policy isn’t very restrictive.
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