(Bloomberg) -- The outlook for inflation and growth in the US would be roughly the same whether Kamala Harris or Donald Trump wins the election, though economists in a Bloomberg survey give the vice president the edge on the economy overall.
A popular inflation metric favored by the Federal Reserve — the personal consumption expenditures price index — is expected to rise an annualized 2.2% on average over the next four years under either candidate, according to the survey of 29 economists conducted Oct. 7 to 10. The median forecast for gross domestic product projects a 2% annualized growth rate on average no matter who wins.
Both are slightly above the Federal Reserve’s long-run estimates, which target 2% PCE inflation and a 1.8% advance in GDP. That’s part of the reason why interest rates would stay relatively elevated under either candidate, though economists see lower borrowing costs in a Harris administration compared to Trump.
The candidates’ economic agendas are very different, so the similar forecasts come as a surprise.
Even so, 62% of the surveyed economists expect Harris to pursue a policy agenda that would be more favorable for the long-run outlook for economic growth, employment and inflation. The remaining 38% said they expect Trump would perform better in that respect.
The biggest concern with Trump’s agenda regards tariffs. The former president has touted baseline 20% tariffs on all imported goods and as much as 60% if they come from China. It’s expected this would likely cause other countries to impose their own tariffs on US goods, which would drive up inflation and slow economic growth.
Harris and Trump have campaigned to prove to voters concerned about high prices and interest rates that their policies would bolster the economy. Yet neither has fully outlined how they would pay for such programs, and both would further strain the country’s fiscal problems.
In a Trump presidency, the budget deficit would average $2.25 trillion over the next four years, compared to $2 trillion for Harris, the survey respondents said. The deficit — which measures how much federal spending exceeds revenues — currently stands around $1.9 trillion.
Harris’ agenda is generally seen adding less to deficits given her plan to increase taxes on wealthy individuals and corporations, which some say could help offset costs for policies such as Medicare coverage for home health aides and assistance for first-time homeowners. But some of her programs could be costly to pay for, including boosting the child tax credit.
Meantime, Trump’s plan to extend tax cuts, as well as additional reductions to corporate tax rates, could further dampen federal revenue. To make up for that, the GOP campaign plans to reduce spending, boost energy production and rely on tariffs.
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