JPMorgan Chase: Trumps election will lead to a surge in US inflation, and the market is not ready

Odaily News JPMorgan analysts say a second term for Donald Trump appears to be a path to inflation that markets may not be ready for. The market does not appear to have priced in the risk premium on the inflationary impact of the Trump campaigns main policies, JPMorgan analysts said in a note to clients. JPMorgan listed statements from the Trump campaign that proposed the following policy goals: plans to extend the 2017 tax cuts, severely restrict immigration through a program to deport illegal immigrants, and impose tariffs on imported goods. The report argues that these moves could all lead to inflation. Analysts note that Trump also plans to replace Federal Reserve Chairman Jerome Powell after his term ends and is talking about amending the law to reduce the Feds independence. But it adds that even if Republicans control both the House and Senate, amending the Federal Reserve Act to weaken the Feds independence seems unlikely to gain enough support in Congress. The report, released ahead of the presidential debate, concludes that Trumps policies overall could mean significant upside risks to inflation, inflation expectations, and U.S. Treasury issuance. (DL News)