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華爾街日報Trump's Tariffs Defied Economists: They Were 'Completely Wrong,' Says Analyst As Inflation Drops, GDP Growth Surges
The outcome of President Donald Trump’s aggressive tariff policies has stunned critics and defied mainstream economic consensus, according to Lou Basenese, the Chief Market Strategist at The Basenese Group.
Economists Were ‘Completely Wrong’
On Thursday, Basenese said the Trump administration’s eye-popping 83% tariffs right “out of the gate” was the “big stick” that brought America’s biggest trading partners to the negotiating table, on Fox Business’ “Kudlow.”
Yet despite the scale of the tariffs, Basenese said “what surprised most economists” was that “it just did not lead to any inflation,” a dynamic he attributed to “deflation kicking in from other deregulation” and advances in AI that helped offset the expected price pressures.
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“The economists were completely wrong,” he said, highlighting the U.S. economy’s robust 4.3% GDP growth during the third quarter, which came in well ahead of estimates at 3.3%, and blowing past the Federal Reserve's own forecast of 1.6%. “You cannot argue with the results.”
Basenese also flagged real estate as a potential catalyst for even faster growth in the new year, after being a “0.2% drag on GDP growth” during the current quarter.
“If the President can reinvigorate real estate, which I believe he can, we can see 5% GDP growth,” he said, pointing out that the last time the country witnessed such strong growth was over three decades ago, during the administration of President Ronald Reagan.
Experts Dismiss GDP Report
Economist David Rosenberg of Rosenberg Research, however, has dismissed the headline growth figures as “fugazi,” saying that the real rate of growth is at 0.8%. He said that the exaggerated figure was largely the result of government spending, a drop in imports, alongside a depletion in personal savings during the period.
Rosenberg also questioned the inflation report, saying, “If you think the CPI data was manipulated, so was today’s GDP report,” last week, in a post on X.
Economist Paul Krugman pointed to a new K-shaped economy, where wealthy, affluent classes continue to thrive, while working families lag.
“Trump may claim that we are economically ‘the hottest country in the world,' but the truth is that we last had a hot labor market back in 2023-24,” he said, while noting that the key culprit here is a frozen job market, which he said was the result of Trump’s erratic tariff policies.
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