"To make matters worse, persistent inflation combined with high interest rates hurt smaller companies the most - magnifying the impact on the small caps index Russell 2000.
Why is that?
3 ingredients: 1. Tariffs. 2. Deportation. 3. Low Taxes (on billionaires, not you, buddy!)
In combination, this is a combustible mixture that'll make it difficult for the Fed to fight an inflation spike in coming months, and running into 2025 as the Trump presidency kicks off.
Of course, Trump might not implement policies around tariffs, deportations, and lower taxes that he promised. Or, let's hope they're not as severe as he's promised on the campaign trail.
But if he does, inflation will head north in a hurry.
The rules are simple. Higher tariffs will take cheaper goods out of the market. Prices will rise.
Mass deportations of illegal immigrants sounds reasonable - after all, they're illegal immigrants - except it'll make cheaper labor unavailable. On average, the price of services will go up."
more at the link
