Damning study warns Trump’s proposals would cause 'large inflation' and 'significant unemployment'

During her late September interview with MSNBC's Stephanie Ruhle, Vice President Kamala Harris attacked former President Donald Trump aggressively on the economy — arguing that his proposals, according to economists, would "shrink" the U.S. economy if he returns to the White House in 2025 while hers would "grow" it if she defeats him in November.

Harris was especially critical of Trump's tariff proposals, which, she told Ruhle, would be incredibly costly to consumers.

Tariffs are one of the things addressed in a report released by the Peterson Institute for International Economics on Thursday morning, September 26, the day after MSNBC aired the Harris interview.

READ MORE: How Trump’s tariffs would 'aggressively' transfer wealth from the poor to the rich: journalist

According to Peterson, Trump's proposals — including higher tariffs, mass deportations and influencing the U.S. Federal Reserve's interest rate decisions — would be quite harmful to the U.S. economy.

CNN's Matt Egan describes Peterson's findings as "stark."

"Even in a 'low' scenario where only 1.3 million undocumented workers are deported and other countries opt not to retaliate against Trump's tariffs, employment, measured as hours worked, would fall by 2.7 percent in 2028 relative to a baseline forecast, according to the paper," Egan explains. "Inflation would climb to 6 percent by 2026, the researchers found. By 2028, consumer prices are 20 percent higher. U.S. gross domestic product (GDP), the broadest measure of economic growth, would be 2.8 percent lower than otherwise by the end of Trump's four-year term."

According to Peterson, Trump's proposals would "cause a large inflationary impulse and a significant loss of employment."

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Peterson, in the report, warned that Trump would "press the Fed" to keep interest rates low and stressed that the Fed needs to maintain its independence.

Egan notes, "The paper found that erosion of Fed independence would cause higher inflation, capital outflows, a significant loss of value for the U.S. dollar and higher unemployment — all of which would 'worsen American living standards.'"

READ MORE: Debunking the myth that 'inflation is caused by wage increases and too much government spending'

Read the Peterson's Institute's full report at this link and CNN's analysis here.