TOPIC SUMMARY
Uncertainty over the Administration’s polices has been ebbing but remains elevated. And it’s shifting from what are the policies to what will be their impacts on the economy. The economic tailwinds of tax cuts and deregulation are in a tug-of-war with the headwinds of tariff hikes, draconian government spending cuts, and deportations. We reckon the headwinds will pull harder through the turn of the year, until the full extent of the OBBBA’s tax cuts kick in. The tailwinds should also find support from sturdy AI-related business investment and a lingering wealth effect. And, from continued Fed policy rate cuts as the central bank strives to balance the risks of a further weakening labor market (which policymakers would prefer not to occur) versus stickier/faster inflation (partly prodded by tariffs). 

LEARNING OBJECTIVES

1.  Understand better the various factors expected to drive economic growth in the 
year ahead.

2.  Understand better how tariffs are impacting the economy and prompting Fed 
policy caution.

3.  Understand better how various government policies are impacting the economy in different directions, and what their net impact should be.

Michael Gregory, CFA
Deputy Chief Economist & Managing Director
BMO Capital Markets

Michael is part of the team responsible for forecasting and analyzing the North American economy and financial markets. He has spent his career working in either economics or financial markets research for firms on both sides of the Canada-U.S. border. Prior to his current role, Michael headed up the Financial Services Analysis team at Bank of Montreal, focusing on regulatory and industry restructuring issues, before shifting to BMO Capital Markets Economics in 2004. He moved to Chicago in 2013, providing research support for the U.S. and Canadian fixed income business, before returning to Toronto in 2016.

Michael is a graduate of Concordia University in Montreal and Western University in London, Ontario. He did doctoral studies at Fordham University in New York City and holds a Chartered Financial Analyst designation.