(Bloomberg) — Rob Subbaraman is preparing for his second Trump presidency with a new accessory in his economist toolkit: the head of global markets research at Nomura Holdings Inc. has downloaded Truth Social, the President-elect’s conservative social media platform.
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“I’m going to get in trouble with my kids,” said Subbaraman, who’s been in his current role in Singapore for a decade. “I tell my kids in the evening to switch off all their devices but I’ve got to be on. I don’t know what Trump is going to do or when he’s going to do it.”
The job has just gotten a whole lot more unpredictable — again — for economists, a typically staid bunch who rely on precedents to build the formulas and spreadsheets that underpin their forecasts. Donald Trump’s first presidency complicated that approach and his campaign pitch and the appointments he’s made since sweeping the Nov. 5 election suggest yet more upheaval for trade, tax, immigration and just about every other policy area you can think of.
Analysts are scrambling to adapt, developing new models, hiring more wonks to crunch thousands of lines of trade code and putting in a lot more face time with nervous clients. The end goal: produce accurate forecasts to help traders, businesses and governments navigate the new, chaotic world.
“Economists use models, and models rely on stable relationships and assumptions, but right now we don’t really know what the assumptions are and the relationships might not be stable,” said Subbaraman, who hosted a call with 250 global clients until midnight US time on election night.
Analysts are particularly focused on tariffs and their impact on the world’s two largest economies — the US and China. Most agree that levies are coming — likely in the second half of 2025 and probably lower than the announced 60% on Chinese goods. There may be universal tariffs, too, but with plenty of exemptions and likely below the advertised 20%, the thinking goes.
If anything close to these levels is added, it could keep prices elevated and delay the Federal Reserve’s easing cycle, which markets have already rushed to price in.
Then there’s the issue of secondary effects, which can hit economies harder than the tariffs themselves. Uncertainty itself is a drag on activity, with Barclays Plc analysts estimating that growth could be cut by 0.3% in the US and 0.8% in China if trade policy uncertainty is heightened to 2018 levels.
