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

JPMorgan analysts said that Donald Trump's re-election as president appears to be a path to inflation, and the market may not be ready for it. "The market does not seem to have yet priced in the risk premium on the impact of the Trump campaign's main policies on inflation," JPMorgan analysts said in a report to clients. JPMorgan listed statements from the Trump campaign team, which proposed the following policy goals: plans to extend the 2017 tax cuts, strictly restrict immigration through a deportation program for illegal immigrants, and impose tariffs on imported goods. The report believes that these measures may all lead to inflation. Analysts pointed out that Trump also plans to replace Federal Reserve Chairman Jerome Powell after his term ends and "talks about" amending the law to reduce the independence of the Federal Reserve. But at the same time, it added that even if Republicans control both the House and the Senate, it seems unlikely that amending the Federal Reserve Act to weaken the independence of the Federal Reserve will receive enough support in Congress. The report, released before the presidential debate, concluded that "Trump's policies overall may mean significant upside risks to inflation, inflation expectations, and U.S. Treasury issuance." (DL News)