We don’t normally like to repeat ourselves in the HOTLINE, so longtime readers with sharp memories may want to skip this item.

The most fail-safe way to forecast inflation under Trump would be to examine the inflation we saw when he was president the first time. We know our friends in the media are now slapping their palms on their forehead saying: why didn’t we think of that?

The chart below shows inflation rates since 2017. Trump’s average inflation rate was slightly BELOW the 2% rate the Fed targets.

It’s instructive, though not statistically significant, that inflation generally went up under presidents who rapidly increased the federal budget, taxes, and regulations – i.e. Nixon, Carter, and Biden – and inflation fell and prosperity returned when the budget was cut and regulatory costs fell: i.e., Reagan, Clinton and Trump.

No one has ever explained to us why Trump 2.0 will cause inflation when Trump 1.0 didn’t.