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Donald Trump’s comprehensive tariffs and rush to reduce the federal government will slow down US economic growth and accelerate inflation, leading academic economists have announced in a study by the Financial Times.
Economists also raised concerns about the quality of the country’s economic statistics – vital information for investors in the world’s largest economy – after the Trump administration decision to distribute an influential councilor.
The FT-Chicago Booth survey follows two weeks of sale in US capital, caused by Donald Trump’s tariffs for US trading partners and its administration’s efforts to reduce the federal government sharply. It also comes before the Wednesday federal reserve decision, in which officials will give their economic forecasts.
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“Tariffs, tax cuts, lower government employment and spending cuts, education financing attacks and (FED) Independence everyone is in the game,” said Robert Barbera, economist at Johns Hopkins University. “Nothing of the kind has been in the game in my 50 years of forecasting.”
Almost all respondents in the survey, who was partnering with the Clark Center at the Booth Business School of the University of Agoikagos, said the uncertainty about economic policy would increase growth, as consumers and businesses back again.
The average rating among the 49 economists surveyed was for the economy to expand 1.6 percent to 2025, decreased significantly from 2.3 percent in the December survey. Last year the US economy expanded by 2.8 percent, the highest level in the G7 group of rich major economies.
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There are already signs that Trump’s tariffs, including those in steel and aluminum, are crossing the American economy. Businesses have reported declines in new orders, while consumer feeling has fallen. Pricements for both metals, the main inputs for the industry, have also increased. Canada and China have also retaliated with their tariffs against the US, while the EU has threatened to do so.
Economists also expect Trump’s policies to promote the highest inflation, pushing the FED further away from its 2 percent target. They expect that the main price index of personal consumption costs-a closely viewed FED-raised meter increased by an annual rate of 2.8 percent by the end of the year by a December forecast of 2.5 percent. The mass increased by a year after year of 2.6 percent in January.
Karen Dynan, a professor at Harvard University who served under Obama’s administration, said “economists have historically fought to find evidence that uncertainty is important for growing in the US”.
She added: “But the uncertainty is so high now that it seems likely to reduce investments.
Some of Trump’s internal policies, including major cuts in the federal workforce led by so -called Elon Musk (Doge) government efficiency department have also been opposed in court. Trump has also been repeatedly returned with tariffs, for example, he provided a large tax engraving in Mexico and Canada just days after imposing them.
“It is not clear which policy actions will stay, with constant overthrow, challenges in courts, reassessment,” said Sarah Zubairy, from the University of Texas.
More than 90 percent of respondents also said they had concerns about the quality of economic data, with just more than half saying they were very concerned and the rest worried.
This follows the Department of Trade Department to distribute the Federal Economic Statistics Advisory Committee, a body that helped improve the quality of economic data last month.
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Trade Secretary Howard Lutnick said earlier this month that he planned to “separate” government spending from GDP measures, a change from the international rate of involvement of public spending in the picture.
“A politically motivated change in the way variables were measured would be worrying,” James Hamilton told California University San Diego, who said he was so gently concerned about the changes in data collection and the distribution announced so far.
