Economist Conor O’Kane says prices for American consumers could be pushed up.
In very traditional Republican terms, he’s talking about tax breaks and reduced regulation. In terms of some of his specific pledges on the economy, he’s talking about getting rid of income taxation on tips and overtime. These things combined have the potential to be quite domestically inflationary, I would say.
If he was to carry through on his pledge to deport 15 million migrants, that’s also potentially an enormous cost – I saw some figures recently that said it will cost [the US economy] about US$65 billion for every 2 million people that are expelled out of the country.
He also said that Trump’s economic policies have the potential to be extremely disruptive for the world economy.
The other key thing, I think, is that Trump’s argument that the president should have a greater say on interest rate policy might spook capital markets. Many central banks around the world have independent control of monetary policy, and that has all been done to reassure capital markets and international investors. I would say that moving away from that is potentially quite risky.
