Yahoo Finance reported on June 20 that if Republican presidential candidate Donald Trump is elected, U.S. inflation could worsen again.
During Trump’s administration, inflation rose 1.9%. Under current President Joe Biden, the inflation rose to 5.4%. At first glance, it seems like Biden is the culprit for inflation. However, his presidency has been marked by the exceptional circumstances of the COVID-19 pandemic.
In response to the pandemic, the U.S. lowered interest rates to near zero, leading to a sharp increase in inflation. However, the inflation trend is easing due to the Federal Reserve’s interest rate hikes.
Given Trump’s policy proposals, inflation will surely rise. He has vowed to impose a 60% tariff on all imports from China and a flat 10% tariff on all other importing countries. This would mean an annual cost increase of $1,700 for the average American household.
Trump also believes the White House should have more control over the Federal Reserve. He is likely to push for interest rate cuts to stimulate the economy, which could fuel U.S. inflation and undermine confidence in the U.S. economy.
Moreover, he wants to extend the tax cuts from the 2017 legislation that expires at the end of 2025.
If this happens, the national debt will increase from $4 trillion to $5 trillion. He plans to resolve this by leveraging the U.S.’s power to issue currency, inevitably stoking U.S. inflation.
In conclusion, Yahoo Finance forecasts that if Trump is elected president, U.S. inflation is bound to rise again.
