Inflation, which spiraled to historic highs under the Biden administration while it was downplayed as "transitory," is now a dirty word again under the Trump administration. Liberal economists and legacy media are suddenly fretting over egg prices (even though they are now coming down) and warning that tariffs will cause everything from inflation, to job losses, to drug shortages, to a full-blown recession. The latest scare is from a Federal Reserve official who predicts Trump tariffs could cause inflation to rise by more than one point.
Putting aside the fact that President Biden also raised tariffs with nary a mention by the media or Wall Street, these forecasts are missing the big picture. "Many on Wall Street and the mainstream media are obsessing about tariffs, spreading untruths that they will cause inflation or a recession," says Fox Business host Larry Kudlow. "The reality is tariffs are a relatively small part of Mr. Trump's overall economic growth plan."
While critics are looking at the tariffs in a vacuum, Kudlow argues the other parts of Trump's economic agenda, like tax cuts and deregulation, will have an equal or greater impact on the economy. "Worst case, tariffs might come to a couple hundred billion," says Kudlow. "Compared to overall stimulus and incentives from tax cuts and deregulation that could come to something over five trillion dollars."
"So people should stop obsessing about tariffs," Kudlow continues. "And they should realize that (Trump's) overall plan may well create the biggest economic boom for working collar folks, and everybody else."