A new presidential administration usually means “change,” but a pair of Stifel Financial Corp. economists recently summarized the impacts of Pres. Donald Trump’s policy agenda on the economy by using two words:

It depends.

Speaking at economic outlook events in Ogden and Kaysville, Lindsey Piegza and Lauren Henderson stressed that tariffs, for example, might result in higher inflation, or they might not.

While tariffs could add sizable barriers to entrance from foreign goods, the main tariff question is how inflationary they will be, Piegza said at her event, presented by Bank of Utah and the Ogden-Weber Chamber of Commerce.

“I would argue a one-time price increase, while certainly uncomfortable for consumers already bearing the brunt of higher prices for years, lacks the perpetual upward momentum needed to incite inflationary pressures,” Piegza, Stifel’s chief economist, told the crowd. “That being said, should this imposition of tariffs result in a back-and-forth, tit-for-tat, retaliatory response as we saw under President Trump’s first term, that can absolutely prove inflationary.”

“Whether or not we agree with these [new] policies, we do have to have that conversation about the effects of these policies, with one being a massive run-up in inflation,” Henderson said in Kaysville at an event presented by bank of Utah and the Davis Chamber of Commerce. “While we are aware of what was promised along the campaign trail, what we’re unsure about is how these policies will be implemented and to what extent.”

Both Piegza and Henderson cautioned that while tariffs could prompt inflation, the impacts might take a few months for consumers to experience. Because Trump had promised tariffs during his presidential campaign, many companies have prepared for them.

“In terms of the timeline of that being felt, many of these tariffs were widely anticipated, and businesses and industries responded preemptively in kind, whether it was [with] different contracts or inventory-building,” Piegza said. “So, I do expect a lag of that price increase being felt, probably about six to nine months before we start seeing that move into the numbers.”

“I think it is also a question of, will the tariffs actually be implemented [or] … are they more of a negotiation tactic?” Henderson said. “I still think that’s to be seen.”

Some Trump-watchers have theorized that the tariffs are being threatened as a ploy, putting pressure on nations to come around to seeing things the way the president does. Others, however, believe Trump is a fundamental believer in tariffs as a way to boost the U.S. economy.

During Trump’s first term, tariffs generally did not lead to higher inflation, Henderson said. But the impacts at that time included businesses becoming uncertain and “somewhat hesitant to invest because they were unsure where would be in 12 months in terms of trade and Fed policy.”

The two economists also extended the “it depends” mantra to other Trump policies, including those related to taxes, immigration, energy, Fed leadership and health care. For example, more stringent immigration laws and rules could worsen labor market shortages and increase wages and production costs. Or it could help address the high costs of social programs.

“It very much depends on the implementation and scope of policy,” Piegza said.

On another topic, the two speakers said the overall risk of inflation remains.

“It’s still very real,” Piegza said. “It’s reduced, certainly, from last year’s concerns, but I wouldn’t put it at zero.” Stifel’s model pegs the likelihood at about 15 percent over the next 12 to 18 months.

Neither speaker expressed confidence that the Federal Reserve could keep inflation at its desired 2 percent rate. That’s because the Fed’s track record of a post-recession “soft landing” is poor: only once, in 1994-95, during the past 60 years.

The economists’ bigger concern is stagflation, which they said is more likely than a recession.

“Virtually stagnant growth, or we could be talking about minimally negative growth” is how Piegza described it, adding that sluggish growth would be accompanied by elevated consumer prices.

“It’s far too early to declare a victory on a soft landing yet,” Henderson said. “Until inflation reaches that 2 percent target, that’s when you can wave that victory flag.”

Trump’s “aggressive” fiscal policy could complicate the Fed’s ability to achieve its price-stability goal, they said. Among other drivers of the national economy are resilient consumers, despite the weight of recent higher prices and higher borrowing costs, who have seen inflation improved. 

Job creation has improved and unemployment claims were “very low” at the time of their presentations, which took place before Trump implemented a job-cutting spree affecting federal agencies.

Meanwhile, the economy is helping some people while hurting others. The gap is not so much between rich and poor, but between those who have assets and those who do not. Some households are not feeling an economic pinch at all because their net worth “felt a massive run-up.”

“Statistically speaking, we know those at the middle or the lower end are less likely to have a stake in the equity market,” Piegza said. “Statistically speaking, they are less likely to own property and therefore have been largely precluded from enjoying this massive run-up in household net worth.”

Consumers generally are still spending, but now at a lower rate. Some have changed their habits, putting off spending one month in order to save up to purchase a larger-ticket “binge” item the next.

“It’s clear,” Henderson said, “that we’re still shifting the goods and services in our basket on a monthly basis.”

During a question-and-answer session, Henderson also noted that despite its troubles and uncertainties, the U.S. has the world’s largest, most liquid economy and the top reserve currency. “We’re still,” she said, “the prettiest girl at the ugly-girl contest.”