If President-elect Donald Trump follows through on his policy program, it will trigger a US recession, according to the London-based think tank National Institute of Economic and Social Research.
“In a worst case scenario, where immigrant expulsions are massive, tariff increases hit straight away and retaliation is swift and effective, GDP could contract by two to three percentage points,” NIESR said in a release this month. That compares with a trend growth estimate of about 2%.
Even modest migrant expulsions would push up wage costs and inflation, according to the analysis by NIESR fellow Paul Mortimer-Lee. Sustained deportations would mean a persistent hit to growth, unlike tariffs’ one-off shock, NIESR said. The report also cautioned that undermining Fed independence could see inflation above 7% by 2027.
