U.S. economy before the midterms: record profits, high prices and mounting debt
A month before the U.S. midterms, corporate profits are at a record and Commerzbank sees 2.4% growth. The cost: tariffs, federal debt above $40 trillion and falling German exports to the U.S.
Symbolic image · Photo: Photograph by Mike Peel (www.mikepeel.net). / Wikimedia Commons, CC BY-SA 4.0 (cropped and resized)
A month before the U.S. midterm elections, analyses in German media paint a mixed picture of the economy under Donald Trump. According to Commerzbank data cited by onvista columnist Heiko Böhmer, U.S. GDP grew at an annualized 1.5% in the second quarter. The bank expects around 4% in the third quarter and 2.4% for 2026 as a whole. After-tax corporate profits are at a record, and household debt has fallen back to its 1998 level.
ZDFheute argues the price is high, however. Tax cuts, mainly for the wealthy, have pushed federal debt above $40 trillion, and rising Treasury yields are raising borrowing costs worldwide, including for the German government. Importers are passing tariffs on to consumers. German exports to the U.S. fell 12% from the first quarter of 2025 to the first quarter of 2026, and car industry exports by more than 28%.
Inflation is also a burden: oil supplies from the Middle East have been disrupted since the U.S. attack on Iran, and German inflation rose to 3.3% in September, according to preliminary data. The Fed raised rates to 3.75-4.00% in September, and Commerzbank expects another hike in December.