Good point about Trumpflation:
Trump seems like a response to the low inflation environment of recent years. Big spenders like LBJ and Rocky helped set off inflation in the late 1960s. Nixon’s fiddling with the economy to get re-elected in 1972 appears to have set off a lot of inflation in 1973. But nothing seems to set off CPI inflation anymore, so why not have a big spender President?The bond market seems to be miles ahead of everyone in figuring this out.
Of course, if we happen to get a lot of CPI inflation, then this will look very different.
It’s kind of like how Black Lives Matter and similar anti-law and order fads are a response to the low crime rate of recent years. We got used to the murder rate falling 3% to 5% per year, so why not cut back on law and order in the name of social justice?
But we immediately got hit with double digit inflation in the homicide rate, with much of the inflation centered in a few cities with big BLM protests like Chicago and Baltimore.