Neel Kashkari, President of the Minneapolis Federal Reserve, warns that Trump’s deportation plan could disrupt the economy, but its ultimate impact would depend on the details of the policies.
Donald Trump has vowed to carry out a large-scale deportation of unlawful immigrants in the U.S. as part of his presidential campaign. Now that Trump has been elected, Kashkari shared his expert opinion on the future of the U.S. economy if this deportation plan is implemented.
Kashkari stated that if farms, factories, or industries relying on immigrant labor suddenly lose workers, it would likely cause some disruption. However, he noted that the overall impact remains difficult to predict, and he emphasized the need to examine the policy details and how the business community, Congress, and the executive branch would adjust.
The U.S. central bank aims to reduce the inflation rate to 2%. Last week, it lowered the interest rate to a range of 4.5% to 4.75%, as the inflation rate currently stands at 2.5%, just half a percentage point above the target. While the Fed plans another quarter-point reduction in the next meeting in December, Kashkari suggested that Trump’s policies might introduce uncertainty.
In addition to the immigration plan, Trump has proposed imposing tariffs on imports and cutting taxes, which could increase government debt. Kashkari stated that the impact of these policies will depend on how other nations respond, as escalating tariffs could lead to a “tit for tat” situation.
