It seems like Trump is making an aggressive effort to expel illegal immigrants as he promised. What will the consequences be? In the short term, they will be cheered on by those who believe their jobs have been lost to them. Will this be it?
Wages where illegal immigrants worked will rise significantly. In particular, job wages in the low-wage service industry will rise significantly, and low-income families who have benefited will be hit hard. In addition, overall service prices will rise significantly, and consumer prices as a whole will rise significantly in the aftermath. So who will be hit?
Above all, the domestic economy will shrink because rising prices will force them to spend less on the same income. Even so, the U.S. Federal Reserve has been increasing liquidity to prevent the ongoing financial crisis from rising to the surface. Eventually, stagflation is more likely than ever.
Stagflation is a chronic economic disease that will take a relatively long time to heal, and the base rate will have to be raised significantly for full healing. For reference, the United States raised the base rate to 21.5% to cure hyperinflation, which began in the late 1960s and continued until the early 1980s.
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