Here's what the Democratic election rout could mean for the U.S. economy
The biggest forces shaping the economy aren't going to change just because the party in power did.
TL;DR
- Democratic election victories may not drastically alter economic policies related to trade, spending, and AI.
- Affordability issues, substantial government spending, and AI-driven growth are persistent economic factors that pose risks.
- Economic policy is largely determined by the executive branch, and President Trump's policies are expected to continue.
- Key economic concerns include inflation, a labor market that is not functioning well, and geopolitical dangers.
- Despite strong GDP and consumer spending, inflation and negative real wage growth are significant problems.
- There may be bipartisan agreement on tariffs, potentially leading to legislative action rather than executive orders.
- High levels of government debt and budget deficits are expected to remain, with national debt at $40.5 trillion.
- Policy uncertainty tied to executive actions on tariffs, geopolitics, trade, and deregulation is likely to continue.
- Democrats might use debt ceiling impasses to seek policy concessions, potentially including tariff rollbacks and spending cut reversals.
- Most of Wall Street anticipates continued economic expansion, with a low probability of recession in the next 12 months.