Despite entering office with a solid economy, President Trump’s administration is encountering criticism from economists and business leaders who say escalating tariffs, unpredictable immigration enforcement and shifting policy are undermining market confidence and slowing growth.
“Most forecasters — from the Conference Board to the International Monetary Fund — agree the U.S. economy will slow significantly,” Project-Syndicate.org recently reported, noting Trump inherited “a strong economy with robust GDP and job growth and declining inflation.”
Federal Reserve projections made in late 2024 estimated 2.1% growth and 2.5% inflation for 2025. Those estimates have since been lowered to 1.7% growth and 2.7% inflation. Meanwhile, global growth is predicted to fall from 3.3% in 2024 to just 2.3% in 2025.
The weakening U.S. dollar and declining business sentiment reflect concerns driven by aggressive trade and immigration strategies.
ICE crackdowns on both undocumented and legal immigrants — many employed in agriculture and construction — are worsening labor shortages. Adding to the uncertain economic climate, tariffs have impacted multiple sectors including manufacturing and tech.
In California, where housing costs are high, residents are being hit especially hard. A California Association of Realtors (CAR) report described mixed small business sentiment, noting it was “dampened by rising inventories and concerns about taxes.” Statewide, homeowners are facing a 21% rise in insurance premiums — nearly triple the national average — due to increasing wildfire risks and labor costs.
According to CAR’s 2025 Consumer Survey, many renters remain blocked from homeownership due to debt, while more homeowners are choosing not to sell. About 60% cited high mortgage rates, and 57% said property taxes discouraged them from moving. This trend is constricting inventory, especially for first-time buyers.
Mortgage activity ticked upward slightly, with the Mortgage Bankers Association reporting a 9.4% weekly rise in applications as interest rates eased. However, average loan sizes dropped to $432,600 — the lowest seen since January.
Despite these signs of life in the housing market, many economists caution that ongoing instability in federal policy may further dampen momentum, threatening what was previously considered a resilient economy.
