5 ways Trump's presidency could affect the economy — and your money

President-elect Donald Trump's victory successful nan November 5 election highlights nan frustrations of millions of voters, pinch galore Americans noting in exit polls connected Tuesday that they're still hurting from nan highest ostentation successful 40 years and dissatisfied pinch nan nation's economical trajectory. 

Trump ran connected a run that vowed to tackle those issues, pledging to end nan "inflation nightmare" and to bring prices down "very quickly." He besides offered a myriad of taxation cuts to various groups, ranging from senior citizens to homeowners, arsenic good arsenic to finance immoderate of those cuts done new tariffs connected imports from China and different nations and to deport millions of undocumented immigrants.

In nan aftermath of Trump's win, economists and argumentation experts are assessing really those policies mightiness effect nan system arsenic good arsenic consumers' wallets. Already, Wall Street is predicting that his policies could boost firm growth, sending nan S&P 500 higher by arsenic overmuch arsenic 2.2% connected Wednesday. 

But immoderate experts statement Trump's plans whitethorn besides boost inflation, perchance hurting consumers who are hoping for alleviation astatine nan checkout counter.

"The devil will beryllium successful nan details," Ed Mills, Washington argumentation expert astatine finance slope Raymond James, told CBS MoneyWatch. "The Trump tax, trade, tariff and migration schedule could person important economical impacts and raise concerns astir a 2nd activity of inflation."

However, compromises aliases alterations to his plans "could mitigate nan impact," Mills added.

To beryllium sure, whether Trump tin respond to voters' astir pressing economical issues isn't certain, particularly if nan House of Representatives flips to Democratic control, which could stymie his plans to widen taxation cuts that were enacted successful his 2017 Tax Cuts & Jobs Act (TCJA) arsenic good arsenic to enact different changes.

Here are 5 ways Trump's policies could effect nan system and your money. 

Your money nether Trump's taxation plans

The halfway of Trump's taxation scheme is to widen nan provisions successful nan TCJA that are group to expire astatine nan extremity of 2025. These see nan law's lowered taxation brackets and expanded modular deduction. 

Trump besides wants to supply deeper taxation cuts for immoderate individuals and businesses, pinch his run proposing lowering nan firm taxation complaint to 15% from its existent 21%. He's floated nan thought of eliminating individual income taxes connected galore types of earnings, from tips to Social Security benefits, but has yet to connection details.

Trump's operation of tariffs and taxation cuts, would rank arsenic nan sixth-biggest taxation trim since 1940, according to a caller Tax Foundation analysis. 

If Trump is capable to enact these taxation codification changes, individual income taxes would diminution for each income groups. But nan biggest beneficiaries would beryllium high-income households, according to an study from nan Penn Wharton Budget Model (That investigation assesses Trump's projected taxation cuts but doesn't see nan effect of tariffs.)

That intends a middle-class family pinch net of astir $80,000 a twelvemonth would get a taxation break of astir $1,740 successful 2026, nan study found. Top-earning households, pinch incomes of much than $14 million, would spot their taxes reduced by $376,910, according to Penn Wharton.

What could hap pinch inflation?

Consumers rank ostentation arsenic 1 of their biggest economical concerns, pinch galore still emotion effect of soaring prices during nan pandemic. Although nan U.S. ostentation complaint has now fallen adjacent to nan Federal Reserve's 2% yearly goal, galore Americans still picture it arsenic precocious because prices haven't travel down; rather, prices are simply rising much slow than they did during nan pandemic.

Economists person cautioned that Trump's plans could reignite inflation. That's because tariffs are fundamentally income taxes paid by American consumers, alternatively than nan countries that export equipment to nan U.S. On apical of that, Trump's scheme to deport millions of immigrants could besides boost ostentation arsenic employers would apt look higher wages owed to a labour crunch. 

"Two main pillars of his argumentation proposals, tariffs and wide deportations, are apt to origin prices to emergence arsenic they will make it much difficult for businesses to nutrient goods," Jacob Channel, main economist astatine LendingTree, told CBS MoneyWatch.

Trump's scheme to levy a 10% tariff connected each imports and 60% aliases much connected Chinese equipment shipped to nan U.S. could adhd $1,700 a twelvemonth successful further costs for a emblematic middle-class household, according to nan non-partisan Peterson Institute for International Economics. 

Trump's plans could boost nan ostentation complaint by arsenic overmuch 1 percent point, bringing it to an yearly complaint of astir 3.4% — supra nan Fed's 2% extremity — according to Andrzej Skiba of RBC Global Asset Management.

"If you adhd 1% to adjacent year's ostentation numbers, we should opportunity bye to complaint cuts," Skiba said. 

Could nan system turn faster? 

The system could initially turn somewhat faster nether Trump's plans to trim firm taxes, but that effect could slice complete time, particularly owed to nan effect of deporting millions of immigrants, according to Oxford Economics. 

Real GDP maturation could beryllium 0.3 percent points higher successful 2026 than if existent economical policies continued, wrote Ryan Sweet, main U.S. economist astatine Oxford Economics, successful a November 6 investigation note. 

But, he added, GDP maturation could yet autumn to 0.6 percent points little successful 2028 than earlier projections owed to nan effect of deportations and higher tariffs. 

Will lodging go much affordable? 

Probably not, according to Bright MLS main economist Lisa Sturtevant. 

First, if Trump's plans reignite ostentation arsenic immoderate economists are forecasting, nan Federal Reserve whitethorn not proceed lowering its benchmark rate. Without further cuts successful borrowing costs for consumers and businesses, owe rates aren't apt to fall, she added. 

Second, deporting millions of undocumented immigrants could effect nan lodging assemblage — which already faces a terrible shortage of homes — because it relies connected these workers to build caller homes, Sturtevant said. 

"His wide deportation connection would person a chilling effect connected nan building industry, shrinking nan already constrained labour unit and stalling severely needed caller lodging construction," she said. "At nan aforesaid time, projected tariffs will summation building costs."

Will Trump's policies thief your 401(k)? 

Possibly, fixed that Trump's projected firm taxation cuts and support for lighter regulations connected businesses, if enacted, could bolster institution profits and assistance nan banal market. 

On Wednesday, indices including nan S&P 500 and Dow Jones Industrial Average soared connected Wall Street optimism for stronger firm growth. 

"Lower firm taxes and/or deregulation of nan power and financial sectors nether a Trump management could supply further support," Solita Marcelli, main finance serviceman Americas, UBS Global Wealth Management, said successful an email. 

Other financial instruments could besides get a boost, including cryptocurrencies, owed to Trump's promise to make nan U.S. nan "crypto superior of nan planet."

At nan aforesaid time, overmuch of these forecasts dangle connected Trump pushing done changes to nan taxation code, regulations and different laws, Channel noted.

"Virtually each of these policies will beryllium reliable to implement, moreover pinch Republican power complete nan House, nan Senate and nan presidency," he said. "With that successful mind, we mightiness not spot overmuch alteration astatine each successful nan broader economy."

He added, "Inaction from nan adjacent Trump management could mean that nan system continues to chug on its existent course."

In:
• Economy
• Donald Trump
• Taxes