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Among prominent economists, no one was more explicit than former Treasury Secretary Larry Summers in warning that President Joe Biden and the Federal Reserve Board risked igniting inflation by overstimulating the economy in 2021. Soaring prices over the next few years proved Summers correct.

Now Summers sees the risk of another price shock in the economic plans of former President Donald Trump. There has never been a presidential platform so self-evidently inflationary as the one put forward by President Trump, Summers told me in an interview this week. I have little doubt that with the Trump program, we will see a substantial acceleration in inflation, unless somehow we get a major recession first.

Summers is far from alone in raising that alarm. Trumps greatest asset in the 2024 campaign may be the widespread belief among voters that the cost of living was more affordable when he was president and would be so again if hes reelected to a second term. But a growing number of economists and policy analysts are warning that Trumps second-term agenda of sweeping tariffs, mass deportation of undocumented migrants, and enormous tax cuts would accelerate, rather than alleviate, inflation.

Rog Karma: The great normalization

In an upcoming analysis shared exclusively with The Atlantic, Mark Zandi, the chief economist for Moodys Analytics, forecasts that compared with current policies, Trumps economic plans would increase the inflation rate and force the Federal Reserve Board to raise interest rates higher than they would be otherwise. If he got what he wanted, Zandi told me, you add it all up and it feels highly inflationary to me.

In a study released last month, the nonpartisan Peterson Institute for International Economics calculated that the tariffs Trump says he will impose on imports would dramatically raise costs for consumers. Trump is promising a no-holds-barred, all-out protectionist spree that will affect every single thing that people buy that is either an import or in competition with imports, Kimberly Clausing, a co-author of the study and a professor of tax policy at the UCLA Law School, told me.

Douglas Holtz-Eakin, president of the center-right American Action Forum and a former director of the Congressional Budget Office, is sympathetic to many elements of Trumps agenda and critical of Bidens. But Holtz-Eakin agrees that Trumps economic plan doesnt bode well for the cost of living, as he told me.

Summers, who served as Treasury secretary for Bill Clinton and the top White House economic adviser for Barack Obama, took substantial flak from fellow Democrats when he repeatedly warned that Biden was risking high inflation by pushing through Congress another massive COVID-relief package in 2021, while the Federal Reserve Board was still maintaining interest rates at historically low levels. The Biden administration and the Fed both did make consequential errors of failing to do macroeconomic arithmetic for which the economy is still paying, he told me.

Summers told me he remains unsure that the policies Biden and the Fed are pursuing will push inflation all the way down to the Feds 2 percent target. But he said he is confident that Trumps blueprint would make inflation worse.

Summers identified multiple pillars of Trumps economic agenda that could accelerate inflation. These included compromising the independence of the Federal Reserve Board, enlarging the federal budget deficit by extending his 2017 tax cuts, raising tariffs, rescinding Biden policies designed to promote competition and reduce junk fees, and squeezing the labor supply by restricting new immigration and deporting undocumented migrants already here. Others note that top Trump advisers have also hinted that in a second term, he would seek to devalue the dollar, which would boost exports but further raise the cost of imported goods.

For many economists, Trumps plans to impose 10 percent tariffs on imported products from all countries and 60 percent tariffs on imports from China are the most concerning entries on that list.

These new levies go far beyond any of the tariffs Trump raised while in office, several of which Biden maintained, said Clausing, who served as the Treasury Departments deputy assistant secretary for tax analysis for Bidens first two years. Trumps proposed tariffs also dwarf the levies Biden recently imposed on electric vehicles and assorted other products from China: Bidens new measures affect about $18 billion in Chinese imports, she said, whereas Trump proposes to raise tariffs on $3.1 trillion in imported goods, more than 150 times as much. Trump has been quite clear that he is envisioning something quite a bit larger than he did last time, Clausing told me.

In the Peterson study, Clausing and her co-author, Mary Lovely, calculated that Trumps tariffs would raise prices for consumers on the goods they purchase by at least $500 billion a year, or about $1,700 annually for a middle-income family. The cost for consumers, she told me, could be about twice as high if domestic manufacturers increase their own prices on the goods that compete with imports.

When you make foreign wine more expensive, domestic manufacturers can sell their wine at a higher price, Clausing told me. The same with washing machines and solar panels and chairs. Anything that is in competition with an import will also get more expensive.

While Trumps proposed tariffs would increase the cost of goods, his pledge to undertake a mass deportation of undocumented migrants would put pressure on the cost of both goods and services. Undocumented migrants are central to the workforce in an array of service industries, such as hospitality, child care, and elder care. But they also fill many jobs in construction, agricultural harvesting, and food production. Removing millions of undocumented workers from the economy at once would create massive labor shortages in lots of different industries, Zandi told me. That would force employers to either raise wages to find replacements or, more likely, disrupt production and distribution; both options would raise the prices consumers pay. If you are talking about kicking 50 percent of the farm labor force out, that is not going to do wonders for agricultural food prices, David Bier, director of immigration-policy studies at the libertarian Cato Institute, told me.

Removing so many workers simultaneously would be disruptive under any circumstances, many economists agree. But it could be especially tumultuous for the U.S. now because the native-born population has grown so slowly in recent years. Bier pointed out that immigrants and their children already account for almost all the growth in the population of working-age adults ages 18 to 64. If Trump in fact extracts millions of undocumented migrants from the workforce, there is no replacement [available] even at a theoretical level, Bier said.

More difficult to quantify but potentially equally significant are the frequent indications from Trump that, as with all other federal agencies, he wants to tighten his personal control over the Federal Reserve Board. During his first term, Trump complained that the Fed was slowing economic growth by keeping interest rates too high, and any second-term move to erode the Feds independencefor instance, by seeking to fire or demote the boards chair, Jay Powellwould be aimed at pressuring the board into prematurely cutting interest rates, predicts Alan Blinder, a former Fed vice chair who is advising Bidens reelection campaign. That would become another source of inflationary pressure, he says, likely spooking financial markets.

In the upcoming Moodys analysis, Zandi estimates the cumulative impact of all these possible changes. He compares a scenario in which Trump can implement his entire agenda with one in which power remains divided between Biden in the White House and Republicans controlling at least one congressional chamber. Inflation, Zandi projects, would be nearly a full pecentage point higher (0.8 percent, to be exact) under the scenario of Trump and Republicans in control than in the alternative of Biden presiding over a divided government. Inflation would be about that much higher under Trump even compared with the less likely scenario of Democrats winning the White House and both congressional chambers, Zandi projects.

Zandi said the only reason he does not anticipate prices rising even faster under Trump is that the Federal Reserve Board would inevitably raise interest rates to offset the inflationary impact of Trumps proposals.

But those higher interest rates would come with their own cost: Zandi projects they would depress the growth in total economic output and personal income below current policy, and raise the unemployment rate over the next few years by as much as a full percentage pointeven as inflation rises. Raising the specter of the slow-growth, high-inflation pattern that hobbled the American economy through much of the 1970s, Zandi told me, It is really a stagflation scenario.

Summers sees the same danger. It is difficult to predict the timing and the precise dynamics, he told me, but it is hard to imagine a policy package more likely to create stagflation than measures that directly raise prices (through tariffs), undermine competition, enlarge deficits, and excessively expand the money supply. There is a real risk during a Trump presidency that we would again see mortgage rates above 10 percent as inflation expectations rose and long-term interest rates increased, he predicted.

Holtz-Eakin, the former CBO director, also worries that Trumps agenda would make it much tougher for the Federal Reserve Board to moderate prices without precipitating a recession. Unlike Zandi and Summers, though, Holtz-Eakin believes that a second-term Biden agenda would also increase upward pressure on prices. Thats partly because of the cost of environmental and other regulations that the administration would impose, but also because he believes a reelected Biden would face enormous pressure to restore new spending programs that the Senate blocked from his Build Back Better agenda in 2021. He also believes that Trumps plans to increase domestic energy production could eventually offset some of the inflationary impact of his other agenda elements.

Kevin Hassett, who served as chair of the Council of Economic Advisers during the Trump administration, has argued that any inflationary impact from Trumps tariff and immigration agenda would be offset by other elements of his planincluding cutting government spending and taxes, increasing energy production, and slashing regulations. Those four effects would dwarf the effects of any other policy proposals, Hassett maintained in an interview with The Washington Post earlier this year.

Holtz-Eakin isnt convinced. He told me that any moderating impact from Trumps energy and deregulatory agenda would take time to develop, while the inflationary effect of his tariffs and deportation plans would be felt immediately. Tariffs happen fast, Holtz-Eakin said. Deportations happen fast.

Rog Karma: What would it take to convince Americans that the economy is fine?

Zandi is even more skeptical. He told me that with domestic oil and gas production already at record levels, Trump has little room to open the spigot even further, or to affect prices much if he does. On regulation, Zandi said he is hard-pressed to see how Trumps plans would translate through to less inflation, at least in a meaningful way.

As with many issues, the potential impact of Trumps second-term plans for inflation has drawn little attention in the presidential race. Instead, the former president so far is benefiting from voters awareness that prices increased much faster under Biden, as the American and global economies emerged from the pandemics disruptions, than they did while Trump was in office.

Apart from concerns about Bidens age, that discontent over inflation appears to be the greatest threat to his reelection. In a recent survey across the seven most closely contested swing states published by the Cook Political Report With Amy Walter, a majority of voters said they considered their cost of living the most important measure of the economys performance. But a daunting three-fifths of voters in the poll, conducted by a bipartisan team of Republican and Democratic pollsters, said inflation is unlikely to be brought under control if Biden is reelected. In contrast, nearly three-fifths of voters said they believed that the cost of living would improve under Trump.

Even though experts such as Summers and Zandi are warning that Trumps economic agenda would have precisely the opposite effect, it wont be easy for Biden to convince voters to weigh those prospective risks more heavily than their retrospective judgments about prices under each mans tenure. But Biden may have no choice but to try. Raising awareness of the inflationary dangers in Trumps agenda may be Bidens best chance of winning a second look from the voters who are now moving toward the former president primarily because they remember gas, groceries, and other necessities costing less while he sat in the Oval Office.

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Nigel Farage’s ‘fantasy’ policies will lead to Liz Truss-style economic meltdown, Sir Keir Starmer to warn

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Nigel Farage's 'fantasy' policies will lead to Liz Truss-style economic meltdown, Sir Keir Starmer to warn

Nigel Farage’s “fantasy” policies will lead to a Liz Truss-style economic meltdown, the prime minister will warn today.

Sir Keir Starmer is set to argue that Reform UK’s pledges would cause mortgages, bills and rent payments across the country to surge.

On Tuesday, Mr Farage vowed to reverse cuts to winter fuel payments and scrap the two-child benefit cap, with an ambition to slash income tax.

But new analysis from the Institute of Fiscal Studies suggest that his party’s aim of hiking the personal allowance to £20,000 a year could cost between £50bn to £80bn a year.

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Will PM’s ‘Farage lite’ strategy work?

Visiting manufacturing workers in the North West, Sir Keir will describe Reform’s economic agenda as a “mad experiment”.

He is expected to say: “In opposition we said Liz Truss would crash the economy and leave you to pick up the bill. We were right – and we were elected to fix that mess.

“Now in government, we are once again fighting the same fantasy.”

More on Labour

Labour is criticising Mr Farage for betting “that you can spend tens of billions on tax cuts without a proper way of paying for it”.

The prime minister will add: “Just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip. The result will be the same. Liz Truss bet the house and lost.”

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Angela Rayner ‘hoping’ for winter fuel update

Sir Keir is referring to the former prime minister’s mini-budget in 2022, which had proposed abolishing the top 45% rate of income tax.

But this policy, among others, spooked financial markets and led to economic turmoil in the UK – with a dramatic spike in the cost of government borrowing feeding through into interest rates.

Mr Farage has argued that his measures can be paid for by scrapping net zero commitments and ending the use of hotel accommodation for asylum seekers.

Recent polls have put Labour second behind Reform UK, while the local election results earlier this month saw Mr Farage’s party win a parliamentary by-election, control of 10 councils and two mayoralties, while Labour lost almost 200 seats.

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Farage could ‘definitely’ become next PM

Sir Keir has been under pressure from his backbenchers to regain the initiative, leading to the party’s U-turn on winter fuel payments last week.

Plans to scrap the two-child benefit cap have also not been ruled out by ministers, in what would be a second reversal of current Labour policy.

Dominic Cummings, the former top aide to Boris Johnson, exclusively told Sky News he believes Mr Farage could “definitely” become the next prime minister, with the right strategy.

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Elon Musk leaves DOGE as job was ‘uphill battle’

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Elon Musk leaves DOGE as job was ‘uphill battle’

Elon Musk leaves DOGE as job was ‘uphill battle’

Elon Musk confirmed that he’s quitting as the White House’s government cost-cutting czar after admitting it was an “uphill battle” trying to slash federal jobs and programs.

Musk’s status as a Special Government Employee leading the Department of Government Efficiency (DOGE) meant that by law, he could only serve for a maximum of 130 days, which was set to finish on May 30.

Musk confirmed his exit in a May 29 X post, thanking President Donald Trump “for the opportunity to reduce wasteful spending.” Reuters reported that a White House official said his “off-boarding will begin tonight.”

Musk told The Washington Post for a May 27 report that the “federal bureaucracy situation is much worse” than he expected, and it was “an uphill battle trying to improve things in DC, to say the least.”

In separate comments to CBS, Musk criticized the multi-trillion-dollar tax break package that House Republicans approved on May 22, claiming it would increase the budget deficit and undermine the work that DOGE is doing.

DOGE, which is named after the cryptocurrency, claims to have saved taxpayers $175 billion since Trump’s Jan. 20 return to the White House, a figure heavily disputed by multiple news outlets, which report the figures are overstated, have multiple errors and are inaccurate.

The project’s claimed savings are only 8.5% of Musk’s initial ambition to cut $2 trillion from the federal budget, which he later revised down to $150 billion.

According to the Reuters report, DOGE has cut almost 12%, or 260,000, of the 2.3 million federal workforce through layoffs, buyouts and early retirement offers.

Despite the criticisms, Musk said on X that DOGE’s mission will “only strengthen over time as it becomes a way of life throughout the government.”

Elon Musk leaves DOGE as job was ‘uphill battle’
Source: Elon Musk

It comes as a federal judge allowed a lawsuit to proceed that accuses Musk and DOGE of illegally exerting power over government operations.

The lawsuit, filed by 14 states, alleged that Musk and DOGE violated the Constitution by illegally accessing government data systems, terminating federal employees and canceling contracts at federal agencies.

Musk admits he spent too much time in politics

In a May 28 interview with Ars Technica, Musk, the CEO of EV maker Tesla, admitted that he spent “a bit too much time” in politics, which some critics claim has impacted Tesla’s performance.

“I think I probably did spend a bit too much time on politics,” Musk said. However, he added that the time he spent on DOGE wasn’t as significant as many believed, and he blamed media coverage for overrepresenting his involvement.

“It’s not like I left the companies. It was just relative time allocation that probably was a little too high on the government side, and I’ve reduced that significantly in recent weeks.”

When Musk announced in Tesla’s first quarter report that his time spent on DOGE would drop significantly in May, Tesla (TSLA) shares rose over 5% in after-hours trading, despite the company reporting an 80% drop in net income.

As of March 31, Tesla still held 11,509 Bitcoin (BTC), currently valued at about $1.24 billion.

Related: Musk confirms X Money beta testing ahead of planned 2025 launch

Tesla shares are still down 5.9% year to date, in part due to Musk diverting his attention away from the company and Tesla’s sales falling considerably in the first quarter.

However, the fall is in line with other Big Tech firms, including Apple (AAPL), Nvidia (NVDA), Amazon (AMZN) and Google (GOOG), which are also in the red in 2025.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

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Panthers win Game 5, move on to Cup Final: Grades, takeaways for both teams

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Panthers win Game 5, move on to Cup Final: Grades, takeaways for both teams

Just when it looked as if the Carolina Hurricanes were going to force a Game 6 after scoring a pair of first-period goals, the Florida Panthers scored the three in the second. And when it looked as if the Hurricanes were going to at least force overtime with a third-period goal from Seth Jarvis? That’s when the defending Stanley Cup champions put an end to the discussion, with captain Aleksander Barkov using his strength to fend off Dmitry Orlov to set up Carter Verhaeghe for the series-clinching goal in their 5-3 win Wednesday in Game 5 of the Eastern Conference finals.

Returning to the Stanley Cup Final to defend their crown is only the start for the Panthers. This is now the 11th time in the past 12 years in which a Sun Belt team has played in the Stanley Cup Final, a distinction that began in 2014 with the Los Angeles Kings and was interrupted in 2019 when the Boston Bruins faced the St. Louis Blues.

Also, a team from Florida (the Tampa Bay Lightning is the other) has won the East in six straight seasons, which is also the same length of the current streak of Sun Belt teams to reach the Cup Final. Furthermore, the Panthers are also the third South Florida professional team to reach the title game or title series in their respective sport for three straight years, joining the Miami Dolphins from 1971 to 1973 and the Miami Heat from 2010 to 2014.

Although they avoided being swept, the Hurricanes were eliminated in the conference finals for the second time in the past three seasons. They’ll now enter an offseason in which they’ll face questions about their roster, and what must be done to get beyond the penultimate round of the playoffs.

Ryan S. Clark and Kristen Shilton look back at what happened in Game 5, along with what lies ahead for each franchise.

Florida was well-positioned for a victory Wednesday. The Panthers had their injured skaters back — Sam Reinhart, Niko Mikkola and A.J. Greer had all been impact players in some form — and they should have added a spark. But it didn’t look as if the Panthers were benefiting from their return early, as the team looked slow out of the gate. Gustav Forsling‘s turnover sent Sebastian Aho on a breakaway that he turned into a 1-0 lead for Carolina.

Florida also couldn’t capitalize on its power plays, which was not great — especially considering Aho’s second goal of the period gave the Hurricanes a 2-0 lead through 20 minutes.

But then the Panthers did what they do best: pounce. Matthew Tkachuk‘s power-play goal cut the deficit in half and Evan Rodrigues had the score tied 30 seconds later. Then it was Anton Lundell giving Florida the lead. That’s just how the Panthers roll — deep. Rodrigues was the Panthers’ 19th different goal scorer in the postseason.

Even though Sergei Bobrovsky looked shakier than usual in the first period, he responded with a strong finish through the final 40 minutes. And Florida’s penalty kill stepped up to stifle the Hurricanes’ power play (which was 0-for-4). The Panthers tightened up and stayed that way through the third period to deny Carolina a chance to force a Game 6.

Florida was not flawless — giving up a goal to Jarvis midway through the third was a bad look — but Verhaeghe scored the winner (off a brilliant assist from Barkov) to make Florida’s just-enough effort sufficient to snuff out the Hurricanes’ flame. And Sam Bennett‘s empty-netter ensured it was three straight Eastern Conference titles for the Panthers. — Shilton

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Verhaeghe puts Panthers back in front

Carter Verhaeghe fires home a big-time goal to give the Panthers a lead late in the third period.

Everything the Canes did in the first period of Game 5 was an extension of how they operated in Game 4. They had a plan, and it was a course of action that saw them take advantage of mistakes such as the ones that led to Aho scoring the goals that staked Carolina to its 2-0 lead. There was something else too, specifically in the way the Hurricanes defended themselves in the midst of a scrum with about five minutes left that showed a fight that wasn’t always seen in the series.

A two-goal lead after one period for a team that was 6-0 this postseason when they scored first was a good sign. The Hurricanes’ defensive identity carried over from their season-saving Game 4 performance. It was enough to suggest for at least an intermission that a Game 6 could be in play. Then came the quick back-to-back goals from Tkachuk and Rodrigues in the second period before Lundell scored a little more than four minutes later to put Carolina behind.

Those goals — coupled with the fact the Panthers limited the Hurricanes to only two shots on goal in the first 10 minutes of the final period — initially made it seem as if the series was over. That’s until Jarvis scored a tying goal and reignited some pushback from the Canes. Or rather, it did until Barkov showed what makes him one of the game’s premier players by holding off Orlov and creating the space to set up Verhaeghe for the winning goal. — Clark


Big questions

Can the Panthers use rest as a refresher?

Florida hasn’t had consecutive days off at this point since early in their second-round series against the Toronto Maple Leafs. And the Panthers are ailing to some degree. All those injured skaters clearly aren’t fully healthy; Eetu Luostarinen left Wednesday’s game after a cross-check from William Carrier, and you know plenty of guys who have been in the lineup every night are craving some downtime.

The Panthers have an opportunity to breathe and reboot after a long string of games, and that could be invaluable in how they show up to the Cup Final. They could know their next opponent as soon as Thursday, but it might also be a few more days before the Western Conference finals is settled.

Florida will have a slight edge either way in the rest department, and capitalizing on it could be a game-changer. The Panthers remember the toll it takes on the body to travel long distances (like from Fort Lauderdale to Edmonton?) in a Final. It’s critical to take advantage of, well, every advantage. Even if it means being Dallas Stars fans for a spell — and hoping the two potential foes can tire each other out for another few games. — Shilton

How aggressive are the Canes going to get this summer, knowing next year might be their strongest chance to strike?

Possessing more than $28 million in cap space, per PuckPedia, presents the idea that the Hurricanes could be a major player in free agency. It’s a level of flexibility that championship contenders covet because it’s so hard to attain once they have several members of their core under long-term contracts.

That’s a problem the Hurricanes don’t have — at least not yet.

They have seven players signed to deals longer than three seasons. It’s a group that includes core members such as Jesperi Kotkaniemi, Jaccob Slavin, Andrei Svechnikov, Aho and Jarvis. But there are considerations to make given that Jackson Blake, Scott Morrow, Alexander Nikishin and Logan Stankoven are all going to be pending restricted free agents after the 2025-26 season, who will then be in need of new deals.

Though there’s a need for the Hurricanes to try to win now, this is also a franchise that has made a point of building large portions of its roster through the draft. Now, the Canes must balance an approach that has allowed them to be a championship contender with one that sees them take the next step, and that will dictate how their front office handles this offseason. — Clark

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