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

According to analysts at JPMorgan, Donald Trump's re-election as president seems to be a path towards inflation, and the market may not be prepared for it yet. JPMorgan analysts stated in a report to clients that "the market seems to have yet to digest the risk premium of Trump's major policy on inflation impact during his campaign." JPMorgan listed the policy goals of Trump's campaign team, which included plans to extend the 2017 tax cuts, strictly limit immigration through the expulsion of illegal immigrants, and impose tariffs on imported goods. The report suggests that these measures could lead to inflation. Analysts also pointed out that Trump plans to replace Federal Reserve Chairman Jerome Powell after his term ends and "discuss" modifying laws to reduce the Fed's independence. However, the report also added that even if the Republicans control both houses of Congress, it seems unlikely that they will gain enough support to weaken the Fed's independence by amending the Fed Act. The report was released before the presidential debate, and its conclusion was that "Trump's policies overall could mean significant upward risks to inflation, inflation expectations, and US Treasury issuance." (DL News)