President Trump’s immigration crackdown is already crimping economic growth as undocumented workers fearful of deportation stay home and reduce their spending, the president of the Federal Reserve Bank of Dallas said Wednesday.

Millions of immigrants “are not going out and shopping, they are staying home, they are afraid if they go out they may not come home,” Dallas Fed chief Robert Kaplan said at the Council on Foreign Relations in Washington.

“On the margin — and it’s too soon for the data to pick it up but you hear it anecdotally – I believe we are going to see it, I believe those people are more likely to save that to spend,” Kaplan added. “And those two effects have some muting effect on consumer spending and therefore GDP growth.”

He noted that consumer spending makes up about 70% of the economy and low and middle income Americans in particular, including immigrants, typically are more likely to spend then save their income.

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Besides getting tough on illegal immigration, Trump has vowed to scale back legal immigration, in part by giving preference to more highly-skilled foreign workers.

Kaplan noted the aging U.S. population elevates the role immigrants play in providing employers an adequate workforce.  Many firms already have complained that with the unemployment rate at a 10-year low of 4.4%, they’ve struggled to find enough workers, curtailing their output and economic growth broadly.

Trump’s crackdown on both illegal and legal immigration is likely to reduce net immigration to the U.S from about 1 million to about 750,000 annually, estimates Mark Zandi, chief economist of Moody’s Analytics. He says that will hurt the economy chiefly by limiting the size of the workforce, as well as by hindering consumption and productivity. Many immigrants, he says, are risk-takers who launch new businesses, which tend to be more innovative and productive than average firms.

Zandi estimates Trump’s pullback in immigration will cut economic growth by an average of a tenth of a percentage point in each year of his term, reducing total economic output by nearly $100 billion by 2021.

“If we do things that limit sensible immigration, we’re likely to slow GDP,” Kaplan said.

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