President-elect Donald Trump made promises on the campaign trail to lower inflation, with about half of his supporters citing higher prices as a significant factor in their decision to vote for him, according to AP VoteCast. However, the control over inflation ultimately lies in the hands of the Federal Reserve, an independent entity that uses interest rates to influence borrowing and spending.
In a recent video by the Wall Street Journal, a former Federal Reserve vice chair breaks down the tools that Trump will have at his disposal to combat inflation. The video explores the various factors that can affect inflation, such as consumer spending, wages, and the strength of the economy.
Despite Trump’s desire to lower inflation, the president’s ability to directly impact inflation is limited. The Federal Reserve plays a key role in managing inflation through its control over interest rates. By adjusting interest rates, the Federal Reserve can either encourage or discourage borrowing and spending, thereby influencing inflation.
The video delves into the ways in which a president can potentially influence inflation, including through policies that impact consumer spending and investment. However, the ultimate authority lies with the Federal Reserve, which operates independently from the executive branch.
As the discussion surrounding inflation and economic policy continues, it remains to be seen how much control Trump will actually have over inflation. With the Federal Reserve playing a crucial role in managing inflation, the president’s ability to directly impact inflation may be limited. Regardless, the issue of inflation will undoubtedly remain a key focus for policymakers and economists in the coming years.
Watch the video by The Wall Street Journal
Video “How Much Control Will Trump Actually Have Over Inflation? | WSJ” was uploaded on 11/25/2024 to Youtube Channel The Wall Street Journal