Republicans Fall Into the Same Inflation Trap as Democrats
Telling Americans they’re wrong about how they feel about price increases is not a recipe for success.
Pressuring the Fed into prematurely lowering rates by claiming there is no inflation threat is a bad message to send.
Photographer: Andrew Caballero-Reynolds/AFP/Getty Images
Imagine driving a car on the freeway at rush hour by looking only in the rearview mirror. Impossible, right? And yet that’s akin to how the White House and its allies want the Federal Reserve to drive monetary policy, by looking backward at the economy’s performance rather than forward.
The Trump administration would prefer the central bank ignore the reams of evidence and research proving that tariffs like the ones the president is putting on foreign goods imported into the US cause the cost of those goods to rise for consumers and businesses. “It’s almost like the economics profession doesn’t fully understand tariffs,” Vice President JD Vance wrote on the social media platform X last week after parts of the consumer and producer price indexes for June came in a bit below forecasts.1