St. Paul finance committee hears state economists warn of slower growth, higher inflation risks

St. Paul City Finance and Budget Committee members heard a presentation May 6 from Dr. Anthony Becker, state economist and professor of economics at St. Olaf College, and Amanda Ianes, manager of the Economic Analysis Unit at Minnesota Management and Budget (MMB), outlining a national and state economic outlook the presenters said should inform the city’s budget planning.

Becker told the committee that “policy uncertainty” is central to the outlook and said the consultants whose forecasts MMB uses — Standard & Poor’s Global Market Intelligence (SPGMI) — now expect U.S. gross domestic product growth to be below 2 percent and cited a baseline 2025 growth rate near 1.3 percent. He said SPGMI’s model shows higher inflation over the next year — “as much as 3.4% for 2025” — and that the data imply only limited moves by the Federal Reserve, with “one rate reduction in this year” in the consultant’s baseline. Becker warned that a drop in business fixed investment projected for 2026 is notable: “A drop off in investment often precedes a recession,” he said, while stressing he was not attempting to predict one.

Becker and Ianes flagged tariff policy as…