Trump’s immigration policy could be key to inflation and changes in the market, the investors warn
President Donald TrumpImmigration policies get great attention to both economists and investors. New restrictions and plans for mass deportations could have a major impact on the American labor market, inflation, and even decisions of federal interest rates. While tariffs They were a big focus in financial discussions, analysts say immigration policy could end an even greater effect on economics.
Immigration was a key initiator of the expansion of labor and overall economic growth. From 2022 to 2024, an average of 3 million people who immigrated to the United States annually, contributing to GDP growth rates from 2.5% to 3%, according to Morgan Stanley. However, according to Trump’s policies, it is estimated that this number will fall to one million this year and 500,000 in 2026. As a result, GDP growth could slow down to 2% in 2025 and 1% to 1.5% in 2026, potentially underpinning expectations on the bull’s shares market, Yahoo Finance reported.
Don’t miss:
According to Oxford economy Take us economists Nancy Vanden HoutenDeportations could worse the lack of work, especially in industries where workers abroad make up a significant part of the workforce. “Employers in these industries could face a significant lack of labor in the event of a mass deportation, which could put pressure on salaries and inflation,” Vanden Houten said Yahoo Finance.
With fewer workers at their disposal and pay salaries, inflation could stay tall. This would force the federal reserves to make difficult decisions on interest rates. Blake GwinnThe head of the US RBC Capital market strategies explained that fewer immigrants can lead to more salary inflation, perhaps delaying or even turning the decrease in the Fed rate expected.
Trendy: ‘Moving to Ubi’-Deloitte’s fastest growing software company allows users to make money on their phones. Today you can only invest $ 0.26/divide with a $ 1000 minimum.
“If we start seeing the pressure of a salary that comes from a continuous fall in immigration, it might actually be more significant for the Fed and could be something I think is [signaling] More risk of hike later this year from even tariffs, “Gwinn told Yahoo Finance.
