The incoming President, Donald Trump, has pledged to deport millions of undocumented immigrants, a move that would constitute the most extensive deportation initiative in U.S. history. However, financial experts on Wall Street are skeptical that the scale of the immigration enforcement will match the grand promises made during Trump's campaign.

A recent Goldman Sachs survey indicates that only a small fraction, 6%, of investors anticipate that net immigration—calculated as the balance between arrivals and departures—will become negative under Trump's tenure. This suggests that the financial sector is wagering on the likelihood that the number of individuals entering the U.S. will surpass those being deported, despite the stringent measures promised by Trump.

This outlook could be a relief to business owners who have expressed concerns that mass deportations, as repeatedly threatened by Trump, would lead to labor shortages and increased costs for consumers.

The survey results highlight the practical challenges that deportations are likely to face, including legal hurdles, logistical impediments, and the economic risks associated with worker shortages in sectors such as agriculture and construction.

Approximately half of the investors predict that annual immigration under Trump will hover between 500,000 and 1 million individuals, a significant decrease from the recent annualized rate of approximately 1.75 million and the peak of 3 million last year. Over 20% of investors expect immigration rates to exceed the pre-pandemic pace of 1 million per year.

Goldman Sachs economists, led by Jan Hatzius, explained in their report that their forecast is "moderately below the pre-pandemic trend because there are legal and logistical limits to executive action." While the President has some authority to control immigration through executive orders, these measures lack the breadth and permanence of legislative actions.

With the House of Representatives and Senate under Republican control in the coming year, the slim majority could complicate legislation, especially on contentious issues like immigration. Investors also harbor significant doubts about Elon Musk's pledge to drastically reduce government spending. Trump has appointed the tech entrepreneur to lead the Department of Government Efficiency (DOGE), a non-governmental entity tasked with streamlining bureaucracy and eliminating unnecessary expenditures.

According to Goldman Sachs, only about 10% of investors believe that the Musk-led commission will achieve a reduction in government spending of more than $400 billion annually. Nearly 10% anticipate a reduction between $200 billion and $400 billion. However, even these figures fall short of Musk's ambitious targets. In October, Musk was quoted as saying at a rally, "I think we could do at least $2 trillion," when asked by Trump's transition team co-chair, Howard Lutnick, about potential cuts from the federal government's $6.5 trillion budget. "Your money is being wasted, and the Department of Government Efficiency is going to fix that."

Nevertheless, a plurality of investors—42%—expect either insignificant or very modest spending cuts, according to Goldman Sachs. Experts have noted that achieving Musk's spending reduction goals without impacting entitlement programs like Social Security, defense spending, or interest payments would be extremely challenging. Former Treasury Secretary Larry Summers stated last month that finding $200 billion in budget cuts would be a feat, given the limited scope for reducing waste.

Glenn Hubbard, a former economic advisor to George W. Bush and former dean of Columbia University's Business School, echoed this sentiment, stating, "It's just mathematically impossible to find $2 trillion." Despite the skepticism, some business leaders are excited by Musk's ambitious goals. Salesforce CEO Marc Benioff remarked, "Elon Musk, the Edison of our era, could revolutionize government through DOGE. Imagine $2T in savings, a leaner, smarter system, & a future-ready nation."

Investors are also contemplating the potential impact of higher tariffs and the side effects of Trump's promised trade agenda. Tariffs have emerged as the top concern among investors, according to the Goldman Sachs survey. When asked about their primary policy concern for 2025, 60% selected the impact of larger tariffs on inflation, economic growth, and stocks.

The next closest risk, at 20%, was the risk that tax and spending measures will provoke fiscal sustainability concerns and the inflation consequences of deportations. Despite their wariness of tariffs, investors are not in a state of panic. On the first trading day following Trump's threats of substantial tariffs on China, Russia, and other BRICS nations, both the S&P 500 and Nasdaq were poised to close at record highs on Monday.