Let's talk about the Fed openly saying Trump’s tariffs are causing inflation....
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What is the Fed’s stance on Trump’s tariffs and inflation?
Well, howdy there, internet people it's Bell again. So today, we're going to talk about the Fed openly saying Trump's tariffs are causing inflation. Before we get into this, it's important to remember that the Fed is incredibly nonpartisan. And Federal Reserve Chair Jerome Powell is without a doubt notoriously nonpartisan. To the point of picking his tie to make sure it doesn't look like he's sporting party colors. Seriously, hit up your favorite image search and look. You never see the solid red or blue ties that often signify party allegiance. It's a good thing he can pull off that purple. I am saying that and making it clear for those who don't follow the Fed closely to stress that when they say it's the tariffs.
How does the Fed’s preferred inflation measure (PCE) reflect tariff impacts?
It's because well, it's the tariffs. Traditionally, there is no red or blue partisan divide at the Fed. The only color they care about is green. There are two quotes to draw attention to. When Powell was talking about the PCE and core PCE, he said quote. These readings are higher than earlier in the year. As inflation for goods has picked up. Reflecting the effects of tariffs. By the way, PCE is personal consumption expenditures.
Why does Jerome Powell say tariffs are the main driver of recent price increases?
In normal person speak, it's the Fed's favorite measure of inflation. When talking about inflation staying stubbornly above its target at a separate point in time, he said quote. It's really tariffs that are causing the most of the inflation overshoot. No partisanship. No attaching Trump's name to it. Just tariffs. Just a statement of a simple economic fact. The tariffs are working as they are intended. They're raising prices.
What are the economic realities behind the claim that tariffs raise prices?
That's what tariffs are supposed to do. Anybody who told you otherwise was selling you something. Just you know, not anything imported or made with imported components. This is probably going to send Trump into an absolute rage filled grandpa Simpson moment, where he declares some nonsense like gas is a nickel a gallon, and that houses are so cheap that landlords pay you. This clearly undercuts all of Trump's claims about the economy in just two quotes. First, no, inflation is not defeated. It's not even at target, and is stubbornly sticking well above gold. Second, no, foreign companies aren't paying for the tariffs. You are.
How might Trump’s reaction to the Fed’s comments affect public perception of the economy?
But again, you're supposed to. That's how tariffs work. Third, prices are not going down as he likes to claim. They're still rising. But much like saying other countries pay for the tariffs, that was never going to happen. Prices don't generally go down after they've gone up. And if we ever saw massive declines across the board in prices, that would be bad actually. Deflationary spirals tend to turn recessions into depressions. As Trump continues to chicken and waffle between telling Americans the economy is great and affordability is a con job.
Why are falling prices (deflation) a concern for the U.S. economy?
And telling everybody the bad economy is Biden's fault. It's important to remember that choc The economists were right, but His policies are causing inflation. Just like they did the last time. Anyway. It's just a thought y'all have a good day.
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Chapters
6 chapters
1
What is the Fed’s stance on Trump’s tariffs and inflation?
0:01–0:55
2
How does the Fed’s preferred inflation measure (PCE) reflect tariff impacts?
0:55–1:32
3
Why does Jerome Powell say tariffs are the main driver of recent price increases?
1:32–2:07
4
What are the economic realities behind the claim that tariffs raise prices?
2:07–3:01
5
How might Trump’s reaction to the Fed’s comments affect public perception of the economy?
3:01–3:45
6
Why are falling prices (deflation) a concern for the U.S. economy?
3:45–4:06
Speakers
1 identifiedMore from Belle of the Ranch
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