News
November 19, 2024
Bridge Business Credit Forecasts Post-Election Economic Scene

With the new Trump administration preparing to take office in January 2025, businesses can look forward to a variety of potential economic opportunities, but should also be watchful for challenges ahead.
Throughout this blog, our Bridge Business Credit CEO Rhett Rowe presents his highly detailed assessment as to what the post-election economic scene may look like. Rowe’s review is based on his many years of experience and that of his colleagues as well.
The economy: Given the upcoming change in the administration, what’s your mile-high view of what we can expect, both pre-inauguration as well as after Jan. 20, 2025?
As we look ahead to the upcoming change in administration, the economic landscape will likely experience both continuity and shifts, shaped by the priorities of the new leadership, its policies, and the broader global economic context.
In short, pre-inauguration we will likely see some uncertainty and limited policy movement, while post-inauguration the focus will shift to the Trump administration’s agenda. How quickly it can implement its economic priorities will depend on the state of the economy, the effectiveness of the Republican-controlled Congress, and global economic conditions.
What uncertainties are at play? When do you think the new Trump administration’s business-economic policies will begin to solidify?
The following themes are key to watch:
- Bipartisanship or Partisanship: The degree to which President Trump can work with a Republican-controlled Congress will be a major determinant of success. If the administration can find common ground with lawmakers across the aisle, we could see more moderate, consensus-driven economic policies. If not, we may witness more partisan bickering and gridlock, leading to executive orders or less effective legislative outcomes.
- Labor and the Workforce: There should be new focus on worker rights, wage growth, and labor market reforms, depending on the administration’s stance on issues like unionization and income inequality.
- Technology and Innovation: Given the role of tech in the global economy, the Trump administration may look to bolster innovation while addressing concerns about data privacy, monopolistic practices, and workforce automation.
What are you and your colleagues in the financial industry most concerned about?
From our view, the financial services industry is most concerned about potential shifts in regulation, tax policy, monetary policy, and trade relations under the Trump administration. How the new leadership addresses issues like corporate taxes, cryptocurrency regulation, ESG standards, and the Federal Reserve’s role in managing inflation will be closely watched. Each of these areas has the potential to impact market stability, investment strategies, and institutional profitability in significant ways.
What concerns do you and your colleagues have about your customers, those SMEs that you work with?
In the post-2024 election landscape, SMEs will be focused on how changes in policy—particularly regarding taxes, regulation, labor, and access to capital—will affect their ability to operate efficiently, compete, and grow. Understanding the broader economic environment, and how it may evolve based on the Trump administration’s policies, will be crucial for SMEs in managing these potential risks. Adaptability, planning, and staying informed about policy shifts will be key to navigating any challenges that arise.
The Fed has signaled potential further interest rate reductions. Your perspective on further reductions, and whether they will happen?
Given current economic trends, rate cuts in 2025 are plausible, but that will depend heavily on the trajectory of inflation and overall economic conditions. If inflation continues to decelerate, economic growth can moderate without entering a recession, and the labor market remains stable, the Fed may start to reduce rates. However, if inflation proves persistent or if the economic recovery remains fragile, the Fed might hold off on cuts until there is clearer evidence that inflation is under control.
The Fed will likely err on the side of caution, but 2025 rate cuts are very much on the table if the economic data supports them. However, the pace and magnitude of any reductions will be gradual and data-driven. We forecast four (4) 25 basis point reductions in 2025.
Under the new Trump administration, what should we (businesses and finance organizations) be worrying about?
In our view, businesses and financial organizations under the new Trump administration should be prepared for:
- Continued deregulation, particularly in finance, energy, and labor markets, which could reduce compliance burdens but increase risks.
- Tax cuts, particularly for corporations and certain industries, but also potential disruptions in trade and immigration policies that could impact labor availability and supply chains.
- A protectionist trade agenda, which could increase tariff costs, disrupt global supply chains, and strain relationships with key trading partners like China and the EU.
- Potential disruptions in healthcare and environmental policies, with significant changes in regulations that could favor certain industries over others.
Businesses that rely on global supply chains, access to skilled immigrant labor, or sensitive consumer regulations should monitor these developments closely. While a second Trump term could offer benefits in terms of tax cuts and deregulation, the increased political volatility, trade risks, and labor shortages could offset those gains for certain industries.
On the other hand, what should we be optimistic about?
The new Trump administration offers businesses several reasons to be optimistic:
- Lower taxes and continued pro-business tax policies that could boost corporate profitability and investment.
- Deregulation that reduces compliance costs and regulatory burdens, especially in sectors like finance, energy, and manufacturing.
- Infrastructure investment and potential economic stimulus to support business growth and job creation.
- Incentives for reshoring manufacturing and a stronger focus on domestic production, benefiting U.S.-based businesses.
- Energy policy that favors traditional energy industries, while potentially encouraging innovation in renewable energy.
- Financial market optimism and tax incentives for business expansion and growth.
- Labor and immigration policies that could support industries with skill gaps, particularly in tech, healthcare, and engineering.
While these policies would benefit many sectors, businesses should remain mindful of potential risks, such as trade conflicts, labor shortages, and the political uncertainty that often accompanies any administration. Nonetheless, for companies looking to grow, expand their footprint, or benefit from a more favorable regulatory and tax environment, there are significant opportunities for optimism.
How will Congress figure into all of this? Do you see lawmakers being supportive now that both House and Senate are Republican-controlled?
Since Republicans control both the House and Senate in the new Trump administration, we should expect a cooperative and aligned relationship between the executive and legislative branches, especially on economic issues like tax cuts, deregulation, and pro-business policies. President Trump would likely have a strong push to pass his agenda, and many Republicans in Congress would align with his priorities, particularly as his policies resonate with the conservative base.
However, there may still be internal divisions within the GOP, particularly between its moderate and more populist factions. These divisions could cause friction, especially on issues like immigration, trade, spending, and the national debt. Additionally, some Republican lawmakers may function as a moderating influence on President Trump’s more contentious proposals, ensuring that there are still checks and balances on certain policies.
Overall, the Republican-controlled Congress should provide a favorable legislative environment for the president’s agenda, but there could still be areas of potential friction that create challenges in moving forward with his proposals.
Conclusion: Overall Economic Impact
Donald Trump’s win will likely lead to a pro-business, deregulated environment focused on tax cuts, energy independence, and infrastructure investment.
There would likely be benefits for large corporations, especially in energy, manufacturing, and financial services. However, the economic impact would be a mix of growth in certain sectors and risks in others, particularly in trade and labor markets.
The long-term impact will depend on factors such as the national debt, trade relations, and the global economic environment. Once president, Trump’s focus on growth through tax cuts and deregulation could stimulate certain sectors, while protectionist trade policies and tight labor markets could create challenges.