This is third post of a series concerning impact of the election on US business, based on a program  presented by the NACD’s New England chapter. Fear has been raised that various articulated Trump policies would drive inflation, most particularly by reason of promised tariff increases on imported goods.

Here again, commentators predicted some moderation of perceived risk based upon the presumption that health of the economy and stock market will remain tantamount goals of the new administration and his close advisers.  It was also noted that inflation control is important to the governors of the “Red States.” It was acknowledged that the Fed is expected to continue downward pressure on interest rates, which means less anti-inflation pressure from Fed policy, and there was no speculation as to what would happen when the Fed chair is replaced (SH note: Powell’s second four-year term ends in May of 2026 and he has announced he has no plans to step down before then).  Whether immigration policy will cause cost increases in goods (through falling domestic supply) resulting in inflation was finessed by the supposition that illegal immigrants will not in fact be mass-deported; to the extent this supposition proves incorrect and the US needs to import more from overseas notwithstanding increased tariffs, then there will be inflationary pressures which cannot be quantified.  No one suggested that there would be no tariff increases, nor offered any specifics as to tariff rates or goods most affected.

The analysis on this subject seemed less rooted in data, understanding of personnel and objective arguments than in a general sense that Trump and his allies, being very business-oriented, would not let inflation run rampant for financial reasons.  There was no suggestion that inflation control would be high on the Trump agenda so as to protect the American consumer, and indeed [personal observation] while Trump campaigned hard on inflation and the increased cost of groceries and goods, the panel did not suggest that consumer pressure would be the influencer with the incoming administration.

No clarity of possible effect of renewed inflation on the country’s credit, cost of borrowing, etc., since no clarity on whether there will be inflation beyond what might be described as “normal.”

Conclusion: unclear future guidance.