The US economy is expected to experience slow growth under President Donald Trump’s policies, according to a report by Moody’s Analytics. The forecast projects that the economy will expand at an average annual rate of 1.7% during Trump’s four-year term, with growth bottoming out at 1.4% in 2028.
The report suggests that Trump’s aggressive economic policies will likely slow down economic growth and push up inflation. However, it does not predict a recession or “stagflation,” which is characterized by high inflation, slow growth, and high unemployment.
The main factors contributing to this slowdown are the tariffs imposed on steel, aluminum, foreign cars, and Chinese imports, as well as the deportation of hundreds of thousands of immigrants and the slashing of social services programs such as Medicaid and food stamps. These policies will impose a significant drag on economic growth, according to Moody’s.
However, the report also notes that some positive factors are expected to offset these negative effects. Tax cuts will give middle-class Americans more spending money, while increased defense and border security spending will boost growth.
The forecast suggests that without Trump’s policies, the economy would be 1.3% larger in 2028, with an unemployment rate of around 4%. The report also predicts that inflation would reach the Federal Reserve’s target rate of 2% by 2028.
Overall, Moody’s report indicates that while Trump’s economic policies will have a significant impact on the US economy, it does not predict a recession or severe economic downturn.
Source: https://eu.usatoday.com/story/money/2025/08/16/trump-policies-economy-inflation-dodge-recession/85668632007