Yes, that's king of my point.

Lastly, the public simply isn't going to make the distinction btw 1x price increase vs on-going inflation.

Say inflation accelerated from 2.5-3% to 3-4% just for a year. Then reverts back.

Interest rates are higher, the media is talking abt inflation non-stop... The politics won't be great. (fin)

Next, I'm not so sure that the cutting of government spending + a tax cut later this year won't also be inflationary in the more traditional sense.

I.e., you're probably shifting demand from government goods to consumer goods at a moment where you are also creating a supply shock. 4/

Companies are more used to raising prices than they were pre-COVID. Consumers are more used to prices going up.

This means there will be less price increase friction than there was before 2020.

To put it in monetarist terms: I think there's a risk that velocity has become unstable. 3/

Bessent is thinking like a 1980/1990's style monetarist: tariffs can't cause *on-going* inflation because they don't expand the money supply.

There's def something to this POV.

However I think this ignores the expectations channel. Expectations are way less anchored than they used to be. 2/

I think of this as a kind of stall speed. If the economy isn't growing enough to keep companies hiring, income growth slows, then spending slows, and suddenly companies are laying people off.

If people want it, the ETF industry will produce it. I'll bet there are lawyers drafting prospecti right now.

Based on what I'm hearing from clients, if someone launched an ex-Tesla ETF, it would sell like hotcakes.