One major reason attributed to President-elect Donald Trump's winning of the 2024 election is that voters remained unhappy with the effects that the post-pandemic spike in inflation had on their pocketbooks during the first two years of the Biden administration.
However, as The New Republic's Malcolm Ferguson writes, experts at the Federal Reserve are "deeply worried" Trump is poised to send inflation skyrocketing again at a time when it has come down significantly from its peak in 2022.
In particular, Ferguson cites recent minutes from Federal Reserve meetings that show officials think that two Trump policies in particular could undo all the work the central bank did to bring inflation back under three percent.
“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes stated. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”
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Trump has vowed to both carry out mass deportations and to slap hefty tariffs on imported goods, two policies that are very likely to spike prices for American consumers.
What's more, Ferguson notes, these officials indicated that they will not be as aggressive in cutting interest rates as they have been over the last half year, which means that interest rates could remain uncomfortably high for many consumers.
"In discussing the outlook for monetary policy, participants indicated that the Committee was at or near the point at which it would be appropriate to slow the pace of policy easing," the minutes stated.