Donald Trump’s Agenda and the Potential Impact on Inflation: What Economists Are Saying

The debate among economists is heating up as they analyze the potential impact of Donald Trump’s agenda on inflation. Trump’s ambitious plans, which include imposing tariffs on Chinese goods and other global trading partners, as well as proposing tax cuts and an immigration crackdown, could all contribute to new inflation pressures in the years ahead.

Economists Ryan Sweet and Bernard Yaros of Oxford Economics conducted a study that found a “full-blown Trump scenario” could push prices up between 0.5 to 1% in 2026 and 2027. This would be on top of the inflation rate otherwise and before any response from the Federal Reserve.

While some Trump allies downplay the concerns of potential price increases, left-leaning groups predict significant additional costs for American households. Adam Posen, president of the Peterson Institute for International Economics, estimated that Trump’s 10% tariff plan alone could push inflation up by “two to three percentage points.”

Trump and his allies argue that his previous tariffs did not result in an inflation spike and that his proposed policies would benefit the US economy. However, projections from Capital Economics suggest that Trump’s tariffs could subtract up to 1.5% from GDP and trigger a rebound in inflation, potentially forcing the Federal Reserve to raise interest rates again.

The outcome of the debate on Trump’s agenda and its potential impact on inflation remains uncertain. With the possibility of Trump returning to the presidency in 2025, the race for Congress and the balance of power will play a crucial role in determining the future direction of economic policy. Stay tuned for more updates on this developing story.