Experts say Trump's financial plans might exacerbate inflation
Date
10/15/2024 4:40:43 AM
(MENAFN) With characteristic confidence, Donald trump has promised that if he is reelected as president, “inflation will vanish completely.” This message is aimed at the American public, who remain frustrated by the rise in consumer prices that began over three years ago. However, most mainstream economists contend that Trump’s proposed policies are unlikely to eliminate inflation and could actually exacerbate it. They warn that his plans to implement significant tariffs on imported goods, deport millions of migrant workers, and seek influence over the federal Reserve's interest rate decisions could lead to increased prices.
In June, a group of sixteen Nobel Prize-winning economists expressed concern in a letter that Trump’s economic proposals would “reignite” inflation, which has dropped significantly since reaching a peak of 9.1 percent in 2022 and is approaching the Federal Reserve's target of 2 percent. A recent analysis by the Peterson Institute for International Economics predicted that, under Trump’s policies, consumer prices could sharply rise two years into his second term, with inflation projected to escalate from an expected 1.9 percent in 2026 to a range between 6 percent and 9.3 percent.
While many economists are not particularly fond of Vice President Kamala Harris’ economic agenda, viewing her proposal to address price gouging as an ineffective measure against high grocery prices, they do not consider her policies to be significantly inflationary. According to Moody’s Analytics, Harris’ policies would likely leave the inflation outlook largely unchanged, even if she had a Democratic majority in both chambers of Congress. In contrast, Trump’s unrestrained economic approach is expected to elevate prices by an additional 1.1 percentage points in 2025 and 0.8 percentage points in 2026.
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