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These include stimulus checks, PPP loans, quantitative easing, and other pandemic-era policies that lingered too long.
Trumps proposed policies feels like a mixed bag when it comes to their impact on inflation.
Some would likely reduce it, while others would exacerbate it.
Consider the push and pull of each as you consider futureinflation rates.
Deflationary Policies Under Trump
Sara Routhier, finance expert withFreeAdvice.com, sees a slow road ahead.
So which of Trumps policies will help reduce inflation?
Slower Immigration
Trumps tighter immigration policies should help reduce inflation, observes Routhier.
The government would spend less on undocumented immigrants housing, medical expenses, and other assimilation costs.
Reduced government spending isnt the only reason why slower immigration would also slow inflation.
Immigration fuels population growth, which in turn fuels economic growth through higher demand forgoods and services.
Greater energy supply drives down energy prices, helping to reduce inflation.
Melanie Musson, a finance expert withClearsurance.com, points to lower US energy prices and fewer foreign imports.
Reduced Federal Spending (Maybe)
More government spending means more money flooding into the economy.
Historically, Republican candidates have proposedslimmer government spending, which can help cut inflation.
That said, Donald Trump is by no means a classical conservative.
He toldFox Businessearlier this year that he wouldnt reappoint Powell, and accused him of being political.
He has repeatedly campaigned this year on lowering interest rates which of course fuels inflation.
Higher interest rates have helped cool inflation by cooling down an overheated economy, explained Sturgeon.
And racing to slash interest rates too quickly can drive inflation rates right back up again.
Retailers dont just eat those higher costs they pass them on to consumers.
Broad tariffs typically raise prices for everyday goods, said Paul Tyler from annuity providerZinnia.
On Chinese imports, that rate would jump to 60%.
That spells inflation on imports for everyday consumers.
Sometimes the economy does need stimulating.
But when the economy is overstimulated like its been for the last three years that stimulus leads to inflation.
Reduced Federal Regulation
Government regulation works like a throttle on the economy.
Like reducing taxes, reducing regulation stimulates the economy, which is in turn inflationary.
Harris has proposedregulatory and tax increaseson corporations.
Trumps policies favor corporations and likely wouldnt wrangle inflation any better than it is now.
Final Thoughts
Each candidates policies would have a mixed effect on inflation.
Dont expect either candidate to wave a magic wand and make inflation disappear.
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