Ambrose Evans-Pritchard: The Trump boom is a high-stakes economic experiment

All the levers of economic stimulus in America are pushed to the maximum, setting the conditions for torrid overheating and an unstable boom by the end of the year.

Bank deregulation, credit expansion, a weaker dollar, lower interest rates, stealth quantitative easing (QE) and neo-socialist affordability gimmicks are combining to stretch the economic cycle and deliver roaring growth in time for the mid-term elections in November.

Dario Perkins from TS Lombard compares it to Britain’s “Barber Boom” in 1972. Anthony Barber, the Tory chancellor, unshackled the banks and let rip with corporate tax cuts, insisting that it was safe because his supply-side measures would raise the non-inflationary speed limit of the UK economy to 5pc. 

Many cheered him on at the time. It was the zeitgeist.

Barber got his boom. It lasted around 18 months. I am old enough to remember the crushing stagflationary bust that followed.

“Stagflation” remains a word not uttered in the polite company of the financial world.
https://englundmacro.blogspot.com/2025/09/once-in-generation-or-so-investors-take.html

Warsh opposed QE at the height of the global financial crisis and persisted in arguing throughout the deflationary aftermath that it would set off inflation.

He did not understand how QE works, whether via the canonical New Keynesian model or via the quantity theory of money model. 

“During the biggest, most consequential monetary debate of modern times, Warsh got it totally wrong,” says Krugman.

Telegraph 6 February 2026

https://www.telegraph.co.uk/business/2026/02/06/the-trump-boom-is-a-high-stakes-economic-experiment/

Krugman: Why the Fed did what it did and why its critics were wrong och svenska bostadspriser

https://englundmacro.blogspot.com/2026/02/krugman-why-fed-did-what-it-did-and-why.html


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