Yet, the year 2025 begins with much uncertainty. One very important question to ask is. What will be the impact of President Trump’s policies on economic growth, inflation and geopolitical developments? The answer is still unclear. High import tariffs, a trade war with China and draconian restrictions on immigration are inflationary and detrimental to Global economic growth. On the other hand, other proposed policies are intended to stimulate growth in the US and reduce inflation. For example, Trump wants to implement measures that stimulate business investment and innovation. Growth would also benefit if Trump succeeds in permanently extending the corporate and income tax cuts, which expire in 2025. Similarly, Trump’s deregulation agenda could stimulate growth and lower prices over time. Trump also wants to increase US oil and gas production by three million barrels per day, which would lower energy prices. The “Department of Government Efficiency,” led by Elon Musk and Vivek Ramaswamy, is supposed to reduce inefficiencies in the public sector. In addition, Trump’s support among tech leaders suggests that we will see accelerated adoption of Artificial Intelligence, automation and biomedical research. Alpine Macro also points out that the US economy is on the cusp of a new “Productivity Boom”. This could lead to a scenario in 2025 with better-than-expected growth, lower inflation and further interest rate cuts from central banks.
