The GOP has blamed President Biden for America’s inflation crisis, but a second Trump presidency could make the problem much worse.

According to Julia Coronado, a former Fed economist and founder of MacroPolicy Perspectives, Trump’s stated policies of tax cuts, higher tariffs, and lower immigration “would bring at minimum a significant burst of inflation.”

Coronado said it could be difficult for Trump to push his policy agenda, especially if Congress and financial markets oppose it due to mounting inflation or other concerns.

“What will a Trump administration do when faced with real tradeoffs? That’s a real source of uncertainty,” she said.

Coronado isn’t the first expert to warn of Trump’s potentially inflation-spurring policies. As Creditnews reported, 16 Nobel Prize-winning economists have penned a letter critiquing Trump’s economic plans, especially from the lens of consumer prices.

Trump’s team pushed back against the economists’ critique, with his former press secretary Karoline Leavitt saying, “Americans know we cannot afford four more years of Bidenomics.”

Bidenomics came with a hefty price tag: More than $2 trillion was committed in President Biden’s first 20 months in office. Under the current president’s watch, the U.S. federal debt eclipsed a record $34 trillion.

The irony is that Trump borrowed twice as much as Biden when he was in office, according to the Committee for a Responsible Federal Budget. Experts warn that the spending spree will continue if he’s reelected, which could have negative consequences for the U.S. dollar.

Plotting dollar devaluation?

According to various reports, Trump’s former economic advisers are already developing plans to make U.S. trade more competitive if he wins a second term. According to Politico, that involves purposely devaluing the dollar.

In April, a former member of Trump’s administration reportedly said, “Currency revelation is likely to be a priority for some members of a second Trump administration, mainly because of the viewpoint that [a stronger currency] contributes to the trade deficit.”

The U.S. has loosely maintained a “strong dollar” policy for several decades, which means that policymakers avoid taking measures that would devalue the currency.

By contrast, countries like China have intervened more directly in currency markets, inducing controlled devaluations to suit various economic goals.

“As your president, one would think that I would be thrilled with our very strong dollar,” Trump said in August 2019. “I am not!”

At the time, Trump blamed the “Fed’s high interest rate level” for the dollar’s strength, even though the central bank’s target rate was only 2%. It would be further reduced in September and October of that year, eventually reaching 1.5%.

With the federal funds rate hovering north of 5%, a second Trump term could mean more public clashes with the central bank.

But Fed independence isn’t something Trump should tinker with, Coronado said.

“You’re playing with fire if you start eroding the independence of the central bank,” she explained. “To mess with that, particularly for the world’s reserve currency, is extraordinarily dangerous.”