logo
Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.
Brief Publisher Logo
FACT BRIEF

Did economists warn that the Trump tax cuts could cause inflation?

By Lisa Freedland
Copy link
email
Copy featured image
email
YES

Economists warned that Trump's 2017 Tax Cuts and Jobs Act could cause inflation by spurring spending.

According to the Tax Policy Center, by putting more money in people's pockets, tax cuts increase consumer demand, creating supply pressures that result in price hikes.

Mark Zandi, chief economist for Moody's, told Detroit Free Press in 2017 that the Trump tax cuts could force the Federal Reserve to raise interest rates in an attempt to stave off inflation, which would dampen growth and threaten recession. 

Reuters similarly reported in 2017 that the tax cuts added to the Federal Reserve's preexisting inflation concerns.  

However, inflation hovered around 2% throughout the first three years of Trump's presidency before declining in 2020 due to the COVID-19 pandemic.

The current inflation spike began in the spring of 2021 as rebounding demand, paired with supply-chain disruptions, drove up prices.

This fact brief is responsive to conversations such as this one.
Sources
Detroit Free Press Trump's tax plan designed to spur growth, but will inflation heat up?
Tax Policy Center Note To Governors: Cutting Taxes Will Make Inflation Worse, Not Better
Reuters Fed, wary of inflation, could lean against Trump tax cut
US Inflation Calculator Current US Inflation Rates: 2000-2022
ABOUT THE CONTRIBUTOR
Gigafact
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
FACT BRIEF BY
Brief Publisher Logo
Latest fact briefs
facebook
twitter
email
email
About fact briefs published on Gigafact
Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.