Courtesy of Mish.
A near-universal consensus has formed that Donald Trump is the “inflation president”.
The Wall Street Journal, Bloomberg, New York Times, Financial Times, Money, and Fortune all say so. I cannot find a mainstream or even a minorstream publication that begs to differ.
Bloomberg goes so far as to say “Trump is about to make inflation great again.” Are interest rates headed to the moon?
Inflation Role Call
The Financial Times says Prepare for a Reversal of Monetary Rule Under President Trump. “Historians may come to see 2016 as an economic policy inflection point. Mr Trump is deeply protectionist, reluctant to reform benefits such as Social Security and favours an extensive infrastructure programme. If implemented in full, which seems unlikely, these bold pledges would add $10tn to the public debt in the next decade.”
Bloomberg reports Investors Are Betting That Trump Will Be the Inflation President. “Trump is about to make inflation great again.”
The New York Times says The Market Is Betting Trump Will Bring Higher Inflation and Interest Rates. “When the government pours hundreds of billions of dollars into infrastructure when there is mass unemployment, it can help put those people back to work and turn it into higher economic output without creating inflation. But when nearly all the people who want a job already have one, that spending just bids up the pay of people already working, eventually resulting in higher prices more broadly.”
Money reports What President Trump Means for Interest Rates — and Janet Yellen’s Job. “A massive increase in fiscal spending to rebuild roads, bridges, and airports, combined with vast deficit-spending in the form of a tax cut, may lead to more money swirling around an already relatively health economy. If you include Trump’s threat to impose a new tariffs on Chinese and Mexican goods, the cost of goods that Americans buy at Wal-Mart and Costco could rise by about 3%, according Moody’s Analytics”
