Peter Berezin’s Thought Of The Day: Why Trump's Immigration Policies May Not Lead To A Tighter Labour Market

I have been generally sceptical of the reflationary aspects of the so-called Trump trade. If Trump's first term is any guide, lower tax rates will have little impact on business spending while higher tariffs are unlikely to trigger much reshoring of manufacturing activity.

Meanwhile, rising debt-service costs could force the Trump administration to cut social spending under the guise of reducing government waste. One open question surrounds immigration. The market consensus seems to be that decreased immigration will lead to a tighter labour market, stoking inflationary pressures in the process.