According to a report by Jinshi Data on September 21, economist Bill Conerly highlighted that growing concerns about U.S. inflation are primarily driven by the rising federal deficit. He emphasized that regardless of the outcome of the upcoming presidential election, deficit spending is likely to increase further.

While economists continue to debate the exact impact of deficits on inflation, Conerly noted that even a small effect would require the Federal Reserve to maintain restrictive interest rates for an extended period. He also pointed out that the employment aspect of the Fed’s dual mandate has softened, with higher unemployment rates, fewer voluntary quits, and a decline in job openings.

Despite the economic strength, Conerly believes the Fed is likely to continue cutting interest rates through the end of 2025, though the long-term outlook remains uncertain.