At a May 1 rally in Waukesha, Wisconsin, Donald Trump said that when he was president, “we didn’t have inflation,” but now we have “horrible inflation on record,” and that “it’s going to get worse.” ” Of course, all three of his claims are wrong. Trump also described inflation as the “national destruction” that destroyed Germany, likely referring to the hyperinflation of 1923, when Adolf Hitler’s beer hall riots failed.
Even for Mr. Trump, who likes to get people involved, that’s a step too far.
President Biden does have an inflation problem, but it’s not a problem like Weimar Germany. Economists expect the annual rate of change in the April consumer price index, which will be released by the Bureau of Labor Statistics next week, to be about 3.4%. Compare Germany in 1923. At that time, people paid for goods with wheelbarrows loaded with cash and burned banknotes to stay warm. Comparing the slightly above-target inflation in the US to Germany’s hyperinflation is hyperbole.
I won’t go into why Americans are so angry about inflation that they might choose Trump over Biden in November. Many commentators, including myself and my Opinion colleagues Binyamin Appelbaum and Paul Krugman, have refuted this question directly.
I’d like to ask a different question: Will inflation go down if Trump wins? Or, I think, higher.
When I wrote about the economic outlook under a second Biden term and a Trump term, one of the clear messages I heard from economists was that many of President Trump’s priorities could reignite inflation. . The most obvious is his threat to raise tariffs on nearly all imports, and even more on imports from China. Some of the costs of these tariffs will be borne by exporting countries, but even more will be borne by U.S. consumers and industry. “I think we should put a collar on” the U.S. economy, President Trump told Fox Business last year, apparently confusing an old laundry detergent commercial with the mercantilist metaphor of a ring of defense protecting domestic industry. It seems so.
President Trump also wants to extend all tax cuts under the 2017 Tax Cuts and Jobs Act, many of which are set to expire at the end of 2025, which would keep the budget deficit high. . Such cuts are already in place, and since most of the continued dollar savings will go to high-income households, where each dollar saved will have a lower propensity to consume, this will lead to moderate inflation. Dew.
Deporting illegal immigrants — Mr. Trump has promised “the largest domestic deportation operation in American history” — earned Mr. Trump big applause on the campaign trail. However, this would raise labor costs and increase inflation.
Another way President Trump could accelerate inflation would be to pressure the Federal Reserve to cut interest rates to spur economic growth. That’s something he repeatedly asked Federal Reserve Chairman Jerome Powell to do during his presidency. But Powell has made it clear that he will not take orders from the White House. His term as Chair ends on May 15, 2026.
If the next president does not reappoint Powell as chairman, he has the option to serve out his term as president until January 2028, but he could also choose to retire. One more seat will be up for grabs in January 2026, potentially creating another vacancy on the seven-member board over the next four years if other governors choose not to complete their terms.
In summary, inflation was not at zero during Trump’s presidency. The current price is not an all-time high. It hasn’t gone up. It’s not bankrupting America. And President Trump’s policies likely won’t improve the situation. If this was just some heat during his campaign, it might be negligible. But Trump has a track record of doing some pretty crazy things. One of his plans could be to raise his prices again if he is re-elected.
written by the reader
I wrote about mortgage portability. There are means to “move” a mortgage to secure another property, and they are commonly used in commercial transactions, although for different reasons and in different forms. Collateral (mortgage) ‘spreader agreements’ are often used to secure new property to secure existing or ‘old’ debt. There are (in my opinion) procedures already in place to enable this in securitized trusts. In reality, this is no more complex than qualifying a new property and issuing a new or amended title policy to “close the deal.”
The fact that the mortgage industry doesn’t want this is covered perfectly in your article. They just don’t find the motivation to work that hard.
james michael costello
Cape Coral, Florida
I appreciated the discussion about what happens if the risks of investing in the US increase. This report brings together relevant research from a wide range of countries on the financial and economic risks of democratic backsliding. Three themes emerge. First, weak rule of law reduces investment. Second, political uncertainty often disrupts asset markets. Third, political actors who seek to undermine democratic practices often have populist and anti-globalization tendencies.
The United States is not immune to political risks either. And it is difficult for investors to diversify the risks emanating from the core of the global financial system.
Rayna Mosley
princeton new jersey
The author is a professor of political science and international affairs at Princeton University.
About the US Risk Newsletter:
The dollar may become unstable.
The yen market is slowing down.
The euro is not heroic.
The Louvre is a clown.
The only currency that’s not bad
I think it’s gold pressed latinum.
Tim Torkildson
Provo, Utah
quote of the day
“And while you’re saving this little money, you can loan out $50 at 7 percent (for one year at the legal rate in New York State at the time) and earn as much interest as you would get by digging potatoes. I realized that right away.” 100 days. The impression has spread within me that it is good to be a slave to money, rather than to make yourself a slave to money. ”
— John D. Rockefeller, quoted by Ida Tarbell in A History of the Standard Oil Company (1904)
