Former Treasury Secretary warns: If Trump fulfills his pre-election promises, the US will suffer from 'inflation impact more severe than 2021'

Former U.S. Treasury Secretary and Nobel laureate in economics, Larry Summers, warned on Wednesday that if Trump fulfills his campaign promises - implementing higher tariffs, domestic tax cuts, and deporting illegal immigrants, the United States will suffer a "more severe inflation crisis than in 2021." (Background: Trump 2.0 policy may reignite inflation! Krugman warns: Tariff war, repatriation of migrant workers is all harm and no benefit to the U.S. economy...)(Background: JPMorgan Chase warns: Trump's victory = resurgence of inflation storm, Fed may suspend rate cuts in December) Renowned economist and former U.S. Treasury Secretary Larry Summers warned on CNN yesterday (13th) that if Trump fulfills his campaign promises, the U.S. will suffer a "clearly more severe inflation impact than in 2021." Summers served as U.S. Treasury Secretary during the Clinton era and was appointed as Chairman of the U.S. National Economic Council during the Obama era, responsible for the recovery policy of the U.S. economy after the financial crisis. He believes that the potential policies advocated by Trump during his campaign - reducing domestic taxes, increasing overseas tariffs, deporting illegal immigrants, and attempting to influence the decisions of the Federal Reserve, could lead to more severe price surges than in 2021. "This accumulation of plans - constantly attacking the Federal Reserve, raising tariffs, sending workers home, inflating budget deficits - this idea is a highly inflationary plan." Trump's economic policies will reignite inflation, more severe than in the Biden era. His warning can be considered quite serious. Summers believes that the Biden administration's overstimulation of the economy in 2021 led to soaring inflation, combined with post-pandemic supply chain issues, and the surge in oil and energy prices caused by the Ukraine-Russia war, ultimately driving the consumer price index (CPI) to a high of 9.1% in June 2022, prompting the Fed to initiate the most aggressive interest rate hike in forty years in March of that year. U.S. Wednesday's inflation data showed that October CPI increased by 2.6% year-on-year, slightly higher than the previous value of 2.4%, and core CPI increased by 3.3% year-on-year, both meeting market expectations. Although the current inflation rate is steadily approaching the Fed's 2% target, Summers smells the risk of inflation resurgence in Trump's economic agenda. He warned on Tuesday: "There is a great risk in Trump's attempt to implement what he said. If he does, the consequences may be that inflation will be significantly higher than the inflation caused by Biden's overstimulus measures." The market is still overheated, and the Fed should not prioritize rate cuts. He emphasized that if Trump actively raises tariffs, not just as a verbal threat lever for trade protocols, then "price increases will bring serious adverse supply shocks." At the same time, he pointed out that while the issue of illegal immigration at the border needs to be addressed, deporting millions of illegal immigrants (many of whom are working) will face a "huge risk of labor shortage, which in turn will be a force that promotes inflation." Of course, it is too early to judge how Trump's plan will implement his economic agenda, and whether he will be convinced to ease the economic policies he proposed before the election. Summers pointed out, "I hope Trump can learn from this election and adjust his plans to avoid causing inflation. I also hope that if inflation occurs, the Fed will not comply." He also expressed disapproval of the Fed's recent consecutive rate cuts, questioning why rate cuts are a priority in such an environment. Nobel laureate in economics: Tariff war, repatriation of migrant workers will lead to inflation rebound. It is worth noting that Summers is not the only economist concerned that Trump's economic policies will lead to a resurgence of inflation. A recent survey by The Wall Street Journal showed that more than two-thirds (68%) of economists believe that prices under Trump's administration will be higher than under HRC's administration. Paul Krugman, a Nobel laureate in economics, has also recently warned that Trump's heavily promoted policy of raising tariffs may not necessarily reduce the U.S. trade deficit, but may lead to a significant decline in the output and employment of the manufacturing industry heavily reliant on imported raw materials, and may also face retaliation from economic entities such as China and the EU, with side effects on the U.S. economy. In addition, raising tariffs may lead to a strengthening of the U.S. dollar, resulting in inflation rebound, hindering U.S. exports, and the deportation of immigrants may also exacerbate inflation problems, ultimately making it difficult not only to achieve the goal of reducing the U.S. trade deficit, but also potentially harming the global economy. Extended reading: "Trump 2.0"'s six policies may trigger another wave of inflation, Nobel laureate in economics warns: the market underestimates the catastrophic consequences Related reports JPMorgan Chase: Trump's inauguration will drive BTC to "soar for 8 weeks," friendly BTC promises, double benefit from tariff policy Fed megaphone: Trump's election may trigger a "resurgence of inflation" crisis! U.S. bond yields hit a 3-month high Trump proposes "abolishing federal income tax": imposing tariffs will make America rich! TSMC becomes the biggest victim? Trump's speech after being shot: God spared me from death "I will cut interest rates to eliminate inflation," and once again mentioned Taiwan's involvement in the third world war (Former Treasury Secretary warns: If Trump fulfills his pre-election promises, the U.S. will suffer a "more severe inflation impact than in 2021") This article was first published on BlockTempo, the most influential blockchain news media in the dynamic area.