Despite Republican attacks on President Joe Biden and his handling of the economy, a survey of economists finds that most believe inflation will be worse if Donald Trump returns to the White House, the Wall Street Journal reported.
That’s not all: According to the quarterly survey of economic forecasters, most also belief Trump would be worse for government budget deficits and interest rates, a blow to the presumptive GOP nominee’s claims to be better for business than his Democratic opponent.
According to he Journal’s survey of 50 economists, 56% agreed that the inflation rate would be worse if Trump wins. Only 16% said inflation would be worse under Biden, while the remainder thought the difference would be negligible.
Most economists believe that inflation and interest rate fluctuations would be more turbulent thanks to Trump’s policy preferences, especially on trade and immigration. The presumptive GOP nominee has already proposed a 10% blanket increase in the tariff on imports, plus a higher tariff at 60% on imports from China, costs that would be passed on to consumers.
“I think there is a real risk that inflation will reaccelerate under a Trump presidency,” the chief global economist at the Economic Outlook Group, Bernard Baumohl, told the Journal. This would mean that the Federal Reserve would have to set higher interest rates to keep inflation on its downward trajectory, Baumohl added.
Consumer prices have indeed increased 19% since Biden took office at the start of 2021, in large part due to supply bottlenecks carrying over from the pandemic, as well as a flood of government spending, including huge sums spent in Trump’s final year. Consumer prices increased by 7.8% under Trump’s administration.
But last month, the Consumer Price Index — a measure of inflation in the costs of goods and services — declined 0.1% from May, according to the latest report from the Bureau of Labor Statistics. That puts the 12-month inflation rate at just 3%.
Trump, meanwhile, has also vowed to undertake the largest deportation of unauthorized immigrants in the country’s history, which in addition to upending lives would reduce the supply of labor in some key industries.
