The election of Donald Trump has brought renewed optimism about his economic policies, after four years of high inflation and weak or nonexistent economic growth. That feeling is reflected in the latest Bankrate survey, which finds 44% of Americans are now optimistic about their financial situation heading into 2025, up seven points from a year earlier. At the same time, the share of those worried about high inflation hurting their finances has fallen from 61% to 44%.
Perception is not always reality, however, and experts warn that turning the economy around is not as simple as a new president waving a magic wand. Mitch Kramer, Founder and CEO of Fluent Financial, believes we are overdue for a painful correction as the economy is weaned off of Biden's big spending. "This new Trump administration is not going to be spending money at the same level the prior administration did, and when you pull the punchbowl away after you've been drinking out of it pretty heavily, you're gonna have a heck of a hangover," he tells KTRH. "And unfortunately, that is probably what is going to happen in the first part of 2025."
What that "hangover" translates to is a recession, according to Kramer. "I don't see anything as drastic as 2008 or 2009, but we're definitely going to have a recession that's probably going to last at least six months, maybe a year," he says. "And it is going to impact people."
"After that, I think a lot of the changes (Trump) will be able to make will improve the economy moving forward," he continues. "But you can't just change natural economic cycles, regardless of who is in the White House."
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