US Dollar Weakens as Yen Surges Amid Japan Intervention and Central Bank Moves 
Tokyo Inflation Slows Despite Energy Pressures and BOJ Policy Outlook 
Asian Stock Markets Rise Amid Wall Street Rally and U.S.-Iran Tensions 
Eurozone Recession Risks Rise as Middle East Conflict Threatens Growth, ECB Official Warns 
Oil Prices Ease Slightly as Strait of Hormuz Tensions and U.S.-Iran Talks Support Market Above $100 
Middle East Conflict Impacts Australia and New Zealand Businesses 
Asian Stocks Rise Slightly as Oil Prices Hold Steady Amid Middle East Uncertainty 
Trump Rejects Iran Proposal as Tensions Persist Amid Fragile Ceasefire 
Gold Prices Hold Steady Amid Iran Tensions and Interest Rate Uncertainty 
Yen Weakens After Intervention Spike as Dollar Stabilizes Amid Global Tensions 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
Wall Street Mixed as Apple Earnings Boost Nasdaq and Oil Prices Ease 
RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
EU Warns of Response as U.S. Considers 25% Tariffs on Car Imports 
US Moves to Secure Gulf Shipping Amid Rising Tensions with Iran 
BCA Research reveals unexpected jobs market impacts from Trump’s immigration policies. The firm argues reduced immigration could lower labor demand, challenge historical economic patterns, and reshape housing and interest rate dynamics.
Immigration's Role in Labor Supply and Demand Dynamics
In a client note this week, BCA Research questioned the idea that Trump’s immigration proposals will stimulate inflation and tighten the labor market, Investing.com reports
Even though the firm's analyst predicts a shrinking labor supply, he or she also predicts a drop in demand for workers.
“Immigrants’ contribution to aggregate demand goes beyond their spending on goods and services,” according to the firm.
“It also includes spending that takes place on their behalf. For example, while illegal immigrants are ineligible for most government welfare programs, they have access to emergency Medicaid services. They can also collect benefits on behalf of US-born children,” says BCA.
They detail how, for every immigrant, there is an additional development opportunity of $40,000 to $80,000 in multifamily housing to meet the need for displaced accommodation.
Housing Development and Immigration Policies
They think that the speed with which policies are put into place will also be important.
Although BCA recognizes the possibility that a rapid deportation campaign could reduce employment opportunities, they maintain that this is highly improbable.
"The infrastructure to deport millions of workers simply does not exist," and reducing immigration at a slower rate would probably have a greater impact on worker demand than supply.
Additionally, BCA claims that this viewpoint is supported by the historical correlation between immigration and interest rates.
Immigration and Historical Interest Rate Trends
Interest rates have traditionally been the highest in the United States and the lowest in Japan, two of the G3 nations that have different immigration policies.
Thus, they reason, the U.S. equilibrium interest rate could fall if immigration were to drop.
Far-Reaching Effects on U.S. Economy
Based on their analysis, BCA has come to the conclusion that Trump's immigration policies will have far-reaching effects on demand and interest rates, complicating any potential tightening of the labor market.
