The tariffs directly cause prices to go up. The inflation-like effect isn't caused by too-rapid growth of currency supply, so lowering the currency supply growth rate & decoupling it from productivity growth risks stagflation . . . unless productivity growth itself is negatively impacted by tariffs, which if true would be repudiation of using tariffs alone as a strategy for growing domestic production.
this post was submitted on 01 Jul 2025
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unless productivity growth itself is negatively impacted by tariffs
For small to medium businesses, it very clearly was. They got hit by sudden new expenses that they could not have budgeted for and sometimes with very unreasonable payment timetables (ex. a small, US-based electronics manufacturer that I am a frequent customer of was hit with $50k out of the blue with a demand that it be paid in two weeks).
Anyone else would have long been fired by Trump for speaking against his agenda. Powell is fairly bulletproof as Trump's advisors are likely holding him back by explaining, as in ELI5 explaining, that firing Powell would shock financial markets and Trump would get the blame.
I SO love Trump's tweets seething over this motherfucker.
Not that it would stop him, but he does not have the authority to fire him.