The latest consumer price inflation (CPI) figures came out a week after Trump sealed up the presidential election.  The numbers are not promising.

The CPI rose 0.2% in October 2024, bringing the annual price inflation rate to 2.6%.  This is a slight uptick from September, which breaks the trend of a falling rate of price inflation.

The median CPI was up 0.3% for the month.  The year-over-year median CPI now stands at 4.1%.

This comes right after Trump’s election, but it also comes after the latest FOMC meeting where the Fed announced another cut to its federal funds rate.

The Fed is cutting rates while price inflation is still above its 2% target.  Meanwhile, the yield curve is close to flat after nearly two years of being inverted.  This screams recession while the Fed still has a slight price inflation problem.

The Trump Problem

Many of the really hardcore Trump fans are under the illusion that he is going to give us this great economy.  We should not live in this false reality.

Even if Trump were sound on economics, which he is not, he wouldn’t be able to work this miracle.  The recession is already baked into the cake.  It is going to happen no matter who is president.

Perhaps it is an interesting irony that Trump oversaw the massive monetary inflation and deficit spending in 2020, which led to the high price inflation a couple of years later under Biden.  There was enough of a lag that Biden got the blame.  If the higher price inflation had happened the moment Biden took office, most reasonable people would not have been able to blame Biden.

The Biden presidency has been a complete train wreck in many ways, but Biden wasn’t really that responsible for the price inflation except that he perpetuated the system of deficit spending.  There likely would have been significant price inflation no matter who became president in 2021.

And now it’s Trump’s turn to inherit the train wreck from Joe Biden.  If the recession starts in the next few months, then most reasonable people will not be able to blame Trump, or at least not at first.  If the recession begins and becomes evident on the day Trump takes office, there will be some on the left who will blame Trump, but this won’t stick with most people.

If Trump takes office and the recession doesn’t hit for another 6 months, then you get into the territory of Trump taking the blame.  If you are a Trump fan, you should be cheering for the start of the recession in the next two months.

The Inflation Pain

Trump can ease some pain by drastically cutting regulations that are just mostly burdensome and add to the cost of consumer goods and services.

Unfortunately, Trump is talking about slapping on massive tariffs.  This will only serve to make products more expensive.  The establishment media, in its quest to criticize Trump on anything, actually gets this point correct at times.  It is one of the very few things.  But we wouldn’t be hearing these criticisms of Harris if she had been elected.

People are still feeling the pain of higher prices.  Insurance has gone up a lot, particularly vehicle insurance in recent years.  This alone can destroy a household budget.

Let’s remember that when they say inflation is coming down, it doesn’t mean that prices are coming down. Overall prices are still going higher, just at a slower pace.  They are going up higher on top of the already high prices where people were struggling.

We may finally get a little relief with a deep recession, but that obviously has its own problems with unemployment and deflating asset prices.  It could mean another financial crisis.  It will really hurt people and companies with high debt loads.

The best way Trump can deal with this is to level with the American people.  He can be honest and tell them that is due to years of misallocations, reckless government spending, and Federal Reserve money manipulation.

Unfortunately, this is not likely to happen.  Trump doesn’t even understand this himself.  And even if he did, he would have to have the courage and honesty to tell the truth to his constituents.

Trump will not be able to pull off any miracles.  The best hope is that he scales down the war machine, cuts some regulations, and makes some actual budget cuts with the help of people like Elon Musk and Vivek Ramaswamy.

With the tough economic times likely to continue in the near future, we have to defend liberty whenever possible.  We have to criticize Trump policies that are bad and praise Trump policies that are good.