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Is inflation avoidable?How much power does the president really have?
How Presidents Shape Inflation
President Donald Trump successfully campaigned on the promise to end inflation.
Presidents influence inflation through their spending decisions, said Wayne Winegarden, an economist atPacific Research Institute.
Running large deficits will create pressure on the Federal Reserve that ultimately causes inflation to rise.
The connection between government spending, economic growth and monetary policy drives inflation, Winegarden said.
But because of its complexity, it is not well understood.
Energy costs are one of the biggest drivers of inflation.
Camberato explained, Think about every single thing you use in your daily life it uses energy.
Your house, all forms of transportation and every item you buy was shipped to you.
We need energy prices to come down, and innovation in energy to happen faster.
Regulations also play a significant role.
Restrictions on companies can have a big impact on what companies can or cannot do, Azoury said.
Productivity of workers and supply chain issues can impact inflation, as well.
High productivity can help increase output and wages.
Supply chain issues can help promote supply and demand.
Lessons from Past Leaders
Historically, presidential policies have had mixed results in controlling inflation.
Camberato said Trumps trade policies during his first term helped him keep inflation low.
That move helped stabilize prices and keep inflation low.
It showed how smart trade policies and a focus on domestic production can make a big difference.
All of that affects prices, Camberato said.
And when markets move, inflation follows.
Executives from companies like Delta Air Lines and Kohls warned that the economic changes are hurting their businesses.
Ultimately, while presidents can shape inflation through economic policies, they dont have absolute control.
Inflation remains a complex issue driven by politics, policy and long-term economic trends.
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