Donald Trump is about to inherit a robust US economy, but his policies will undermine its strength this year through higher inflation and reduced growth.
The US economy enters the year in strong shape. Output is above pre-pandemic trends, unlike in other major economies. Unemployment remains low, hovering around 4%. Inflation is on track to return to the Federal Reserve's 2% target, allowing interest rates to begin coming down from their peak. And stock markets and business sentiment alike betray optimism that the best is yet to come.
They are about to be disappointed. President-elect Trump's agenda poses underappreciated risks to the US economic outlook. Two of Trump's core campaign promises will be particularly detrimental.
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