Most years, presidents don\u2019t have much impact on the economy; it is just too big and complicated.<\/p>\n\n\n\n
This year won\u2019t be like most years. President Trump is taking unprecedented steps to run the economy hot, and there is an excellent chance he\u2019ll succeed.<\/p>\n\n\n\n
Washington has three big levers that affect growth: fiscal policy (taxes and spending), monetary policy (interest rates) and credit policy (the ease of borrowing). Historically, they were not coordinated: Fiscal policy followed the congressional cycle, monetary policy was set by an independent Federal Reserve and credit policy reflected often random decisions by regulators.<\/p>\n\n\n\n
This year, all three are dialed toward stimulus, reflecting a single-minded focus by Trump and congressional Republicans on faster economic growth. They hope that will deliver victory in the November midterm elections.<\/p>\n\n\n\n
In the process, they are compromising other goals: taming debt, Fed independence and long-term financial stability. The consequences of that come later.<\/p>\n\n\n\n
Read it all<\/a>.<\/p> Under my taxonomy, there are 3 macro policy levers: fiscal, monetary and credit. This year, Trump has dialed all 3 towards stimulus in order to run the economy hot. This is unprecedented, and will probably work. The costs come later. https:\/\/t.co\/7RTaSK2I5D<\/a><\/p>— Greg Ip (@greg_ip) January 14, 2026<\/a><\/blockquote>