MADISON, Wis.–A forecast for how many of the Trump administration’s policies will affect the economy and, in turn, credit union performance, has been shared by one CU economist.
Steve Rick, chief economist with TruStage, noted in remarks to the company’s Discovery 2025 virtual event that tariffs are the question everyone is watching, and he used a color-coded chart to review the effects of tariffs on several economic categories.
“Expect a little bit higher inflation than we would have had without the tariffs and a little lower GDP growth,” said Rick. “The good news is we could have lower deficits, of course. Tariffs are taxes and while we’re bringing in more tax revenue, lower deficits that could lower interest rates, specifically the 10 year treasury bond that could help the mortgage business.”
Tighter Labor Market
Mass deportations, meanwhile, will tighten the labor market by reducing the supply of labor, should push up costs and make it a little bit harder to find employees, he said.
A third factor, an extension tax cuts, should be good for the economy, he said, but will also mean higher inflation because with a tax cut people will have a little bit more disposable income and will spend more.
Rick touched on numerous other issues, saying it’s a mixed bag of red and green signals economically. His remarks were similar to those reported in the CU Daily earlier. For the full story, go here.
