On the heels of the recently enacted One Big Beautiful Bill Act (OBBBA), the United States is riding an economic wave that many experts warn may be short-lived. The Committee for a Responsible Federal Budget (CRFB), a respected nonpartisan watchdog, sounded the alarm on August 27, 2025, cautioning that the country is experiencing an “economic sugar high” — a term that conjures images of a quick rush followed by a crash. Their analysis, echoed by other major think tanks, suggests the current boom is built on shaky ground, with the nation’s fiscal health and the independence of its central bank both under fresh scrutiny.
The OBBBA, which was signed into law earlier this year, is set to inject a jolt of energy into the U.S. economy. According to the CRFB, the legislation will increase economic output by nearly 1% in 2026, fueled by government borrowing of $600 billion per year from 2026 through 2028 and a raft of temporary incentives for both labor and investment. These measures, supporters argue, will supercharge growth in the short term. The White House Council of Economic Advisors, for instance, projects a near-term stimulus boost of nearly 2.4% and a 4.75% increase in GDP by 2028, before growth tapers to 2.55% by 2034.
But the CRFB’s detailed assessment, as reported by Fortune, paints a less rosy long-term picture. “An economic sugar high doesn’t mean sustained growth,” the group warned. The watchdog points out that these gains are fleeting, with the economy expected to revert to slower growth as the surge in demand and supply wears off — especially if full employment persists. The real kicker, they say, is the projected $4.1 trillion increase in national debt through 2034, which could crowd out private investment and put the brakes on any lasting economic momentum.
This situation is eerily reminiscent of the aftermath of the 2017 Tax Cuts and Jobs Act (TCJA), another policy that promised to turbocharge the economy. The CRFB notes that while the TCJA provided a one-time lift — with growth rates of 3% in 2018 and 2.6% in 2019 — the effect quickly faded. Since 2019, GDP has averaged about 2.3% annual growth, or 2.1% excluding a recent immigration-driven labor force boost, according to the CRFB. In their words: another sugar high, followed by the inevitable crash.
Forecasts from the Tax Policy Center and Yale Budget Lab back up the CRFB’s assessment. Their models estimate the OBBBA will boost output by 0.7% to 0.9% in 2026, but that the effect will quickly diminish. By 2034, some projections even show a decline in economic output of up to 0.2%. The Tax Foundation offers a more optimistic take, estimating a 1.25% output increase by 2034, but the Penn Wharton Budget Model lands on the pessimistic side, predicting a 0.2% decrease.
The Congressional Budget Office (CBO) and other independent groups have also weighed in. Although the CBO has not released a score for the final version of the OBBBA, its analysis of an earlier draft points in the same direction: a burst of growth, then stagnation. The CRFB’s report underscores the need for sustainable fiscal reforms — not just temporary stimulus — to address the ballooning $37 trillion national debt. Without credible action, they warn, “today’s economic buzz will be followed by years of stagnation.”
Meanwhile, Wall Street has been riding its own rollercoaster. The Dow Jones industrial average hit a record high on August 22, 2025, with the S&P 500 hovering near all-time peaks throughout the month. But not all that glitters is gold. Mid-August saw a tech selloff, rattling markets amid fears of a bubble in artificial intelligence stocks. Investors scrambled for safe havens, sending gold prices to a two-week high and weakening the U.S. dollar against major currencies. Even the usually resilient crypto markets took a hit, with Bitcoin and other digital assets tumbling further in the wake of mounting uncertainty.
Adding fuel to the fire, President Donald Trump’s decision to remove Federal Reserve Governor Lisa Cook in early August sent fresh shockwaves through the financial world. The move, announced in late July and executed at the start of August, marked a dramatic escalation in Trump’s often-contentious relationship with the Federal Reserve. As Reuters and CNBC reported, the ouster stoked fears of political interference in the central bank’s operations and raised questions about the future direction of monetary policy.
The initial market reaction was mixed. While major indices like the S&P 500 and Nasdaq stayed relatively flat, the dollar’s weakness and the surge in gold prices signaled investor unease. Some analysts, like Jay Hatfield of Infrastructure Capital Advisors, suggested that Trump’s move could pave the way for a more dovish Fed, potentially favoring rate cuts in the near term. With Stephen Miran — Trump’s pick to replace Cook — joining the Board of Governors, the Fed could tilt toward a Republican-leaning majority, making monetary easing more likely. Hatfield argued that this realignment “could accelerate rate reductions, benefiting both stock and bond markets.”
But not everyone is convinced this is good news. David Wessel of the Brookings Institution sounded a more somber note, warning that Trump’s actions threaten the Fed’s autonomy and, by extension, the stability of democratic institutions. Analysts at Piper Sandler echoed these concerns, pointing out that markets have historically failed to check political pressure and that the erosion of traditional economic “pillars” — like free trade and sound money — could ultimately undermine the bull market’s foundations.
The shakeup at the Fed could have far-reaching consequences. With Trump appointees gaining greater influence, even regional Federal Reserve Bank presidents may face increased scrutiny when their terms come up for renewal in early 2026. This could lead to a reconfiguration of the Federal Open Market Committee (FOMC), potentially shifting the balance of power within the central bank and altering the course of U.S. monetary policy for years to come.
Despite the uncertainty, some strategists remain focused on the immediate outlook. UBS Global Wealth Management, for example, still expects 100 basis points of rate cuts over the next four meetings, though they caution that political pressure on the Fed is rising. Critics like Hatfield, meanwhile, argue that the real issue is not Trump versus the Fed, but rather the Fed’s historical reluctance to adjust policy in line with changing economic conditions.
As the U.S. economy enjoys its current high, the warning signs are hard to ignore. The combination of massive fiscal stimulus, swelling debt, and a central bank under political pressure sets the stage for a potentially rocky road ahead. The lesson from recent history? Sugar highs are sweet, but the crash can be bitter — and lasting stability remains elusive without real reform.
