Investors this year have grown increasingly confident the US economy will achieve a “soft landing.”

But the election of Donald Trump as the nation’s next president has complicated the outlook.

And some economists now think it’s likely the US could face another inflation resurgence if Trump follows through with his key campaign promises.

“We are in the soft landing,” Nobel prize-winning economist and Columbia University professor Joseph Stiglitz said at Yahoo Finance’s annual Invest conference on Tuesday. “But that ends Jan. 20.”

Trump and his proposed policies have been viewed as potentially more inflationary due to the president-elect’s campaign promises of high tariffs on imported goods, tax cuts for corporations, and curbs on immigration. Those policies could also pressure an already bloated federal deficit, further complicating the Federal Reserve’s path forward for interest rates.

“The biggest risk is a large across-the-board tariff, which would likely hit growth hard,” Jan Hatzius, chief economist at Goldman Sachs, wrote in a note to clients on Thursday.

Jennifer McKeown, chief global economist at Capital Economics, also acknowledged in a note this week there are “upside risks” to inflation “stemming partly from Trump’s proposed tariff and immigration policies.”

And investors have taken notice.

On Wednesday, the latest Global Fund Manager Survey from Bank of America highlighted increased expectations of a “no landing” scenario, in which the economy continues to grow but inflation pressures persist, leading to a higher-for-longer interest rate policy from the central bank.

Tariffs have been one of the most talked-about promises of Trump’s campaign. The president-elect has pledged to impose blanket tariffs of at least 10% on all trading partners, including a 60% tariff on Chinese imports.

“It will be inflationary,” Stiglitz said. “And then you start thinking of the inflationary spiral. The prices go up. Workers will want more wages. And then you start thinking of what happens if others retaliate [with their own duties.]”

Minneapolis Fed president Neel Kashkari categorized a possible retaliation as a “tit-for-tat” trade war, which would keep inflation elevated over the long term.

“If inflation goes up, [Federal Reserve Chair Jerome Powell] is going to raise interest rates,” Stiglitz said.

“You combine the higher interest rates and the retaliation from other countries, you’re going to get a global slowdown. Then you have the worst of all possible worlds: inflation and stagnation, or slow growth.”

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Investors have dialed back rate cut expectations in preparation. Since the Fed’s first rate cut on Sept. 18, markets now expect three fewer rate cuts between now and the end of next year, per the CME’s FedWatch Tool.

But the US economy has remained resilient in the face of high interest rates. Retail sales once again topped estimates for the month of October, GDP remains strong, the unemployment rate continues to hover at around 4%, and inflation has moderated despite its bumpy path down to 2%.

Additionally, it remains unclear which policies will be a priority once Trump takes office or if he’ll fully commit to the promises he’s already made.

The only certainty is change.

In 2025, the GOP has not only secured the White House but also maintained control of the House of Representatives and flipped the Senate.

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“The Republican sweep in the elections is likely to bring sweeping policy changes,” Bank of America’s US economics team wrote in a client note on Friday.

“There are plausible scenarios in which growth could run above 3%, or the economy could enter a recession,” the team said. “Our base case is sanguine, but our conviction is low. As the policy agenda becomes clearer next year, we will be nimble in adjusting our forecasts as needed.”

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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The trading accounts of US banks topped $1tn in the third quarter — their highest level in more than 16 years and close to an all-time high — as the nation’s largest financial firms seek to profit from rebuilding their market-making businesses.

That growth has at the same time left the banks, particularly the largest ones, more exposed to market moves than at any time since the financial crisis as they hold ever-greater inventories of price-sensitive securities.

Their trading accounts last peaked at just over $1tn, slightly higher than today, in the first quarter of 2008, according to industry tracker BankRegData. That was just a few months before the bursting of the housing bubble that led to a credit crunch, cratered markets and sent the US into a significant recession.

“You see the cash that the banks had sitting on the sidelines flowing recently into their trading books,” said Bill Moreland, who runs BankRegData, which compiled the trading data from the bank’s regulatory filings with the Federal Deposit Insurance Corp. “It is a bet on financial assets, rather than say lending or the economy, because that’s where they see the returns.”

Trading was a key source of the bank instability that contributed to taxpayer-financed bailouts in the financial crisis, as desks took proprietary directional bets that turned against them. After the crisis, lawmakers adopted rules that prohibited banks from speculating with house money and required that trading facilitate client business.

Nearly all of the trading activity in the US banking industry remains concentrated at the nation’s largest banks. The biggest is JPMorgan Chase, which had $506bn, roughly half the industry total, in its trading account at the end of the third quarter, up from $329bn at the beginning of the year, according to its FDIC filings.

But all of the big lenders, including Citigroup, Bank of America and Wells Fargo, have boosted their trading assets this year, according to data logged with the FDIC.

Trading accounts at Goldman Sachs and Morgan Stanley, which generate more of their income from Wall Street activity than lending, are the highest they have been in years.

The biggest jump, for all the banks, has been in plain-vanilla equity holdings. JPMorgan’s stock market traders held $190bn in securities, more than double the $85bn they had at the beginning of the year.

But bank trading desks also have increased their holdings of asset-backed securities. These have been among Wall Street’s hottest financing markets this year, such as bonds comprised of consumer debt like credit cards and auto loans.

Despite the jump in assets, executives and industry analysts say the banks’ trading businesses are significantly less risky than they were prior to the financial crisis.

They say much of the activity that the big banks carry out is either on behalf of their clients or to facilitate client trades. The Dodd Frank Act and other post-financial crisis legislation have made it hard for banks, as they once did, to make proprietary bets or to put their depositors funds at risk.

For example, value-at-risk — or VaR — assessments, which estimate how much a bank could lose in the market in any one day, in most cases stand at levels that are half of where they were before the financial crisis.

And while trading assets are up, they still only make up 4 per cent of the banking industry’s total assets, and about half of what they were as a percentage of assets back in 2008.

“Generally the business of banks these days is to sell the securities and investment to others, not to hold it themselves,” said Christopher Whalen, a veteran bank analyst at Institutional Risk Analyst. “But activity is up and can’t sell everything you want.”

Additional reporting by Joshua Franklin in New York.

As it remains in a state of limbo, Kevin Costner’s four-part Western “Horizon: An American Saga” has already been marked for dead by some in the industry.

Yes, things aren’t looking too bright for Costner’s saga, and with the third film having only been partially shot, his wallet is already looking at financial losses in the excess of $75M, maybe more. These downer numbers still haven’t stopped Costner in seeking financing to complete the third and fourth films.

In an interview with Deadline, Costner admits having had meetings with some of the richest people in the world.

“I’m hoping, I’m dreaming, I’m meeting all the billionaires that we all hear about — they’re all hiding in the shadows,” Costner is now telling Deadline.

“I’m don’t know how I’m going to do it,” he added, “but I’m going to make [Chapter 3] and then I’m going to make the fourth one. And if you want to say ’the end’ at that point, then that’s the end.”

Costner describes the project, and its hopeful completion, to pushing the rock of Sisyphus up the mountain and, alternately, to searching for proof of extraterrestrial life.

“It’s my own private UFO,” he said. “I’ve seen it, and I will never forget it, and I chase it as long as I can. … I will figure out a way to bring you 3 and 4, because you’ve gone to 1 and you’re gonna go to 2, and we’re all gonna go west together.”

Earlier in the year, Costner had repeatedly stated that he would be shooting ‘Part 3’ this fall, but that clearly hasn’t materialized. He shot nine days’ worth of footage in April, but production had to “temporarily” shut down due to lack of funds.

There is currently no release date for ‘Chapter 2,’ which was pulled from Warner Bros’ summer schedule after the first instalment, which cost $110M, failed to lure an audience into theaters, earning just $29M domestically. ‘Chapter 2’ did end up world premiering at the Venice Film Festival in September, albeit to weak reviews which further complicated matters for potential distribution.