The average inflation rate when Donald Trump was president was 1.9%. During Joe Biden’s presidency, inflation has averaged 5.4%. Many voters think of Biden as the inflation guy.

Yet some prominent investors think future inflation will be worse if Trump wins the 2024 election than if Biden wins. In a June 18 analysis, Goldman Sachs argued that investors should buy gold if they’re worried about the inflationary impact of Trump’s economic agenda, should he become president.

“We see value in long gold positions as an inflation hedge from geopolitical shock including tariffs, Fed subordination risk, and debt fears,” Goldman analysts wrote. While they didn't identify that as the Trump agenda, those three potential shocks are a clear reference to economic policies Trump has been floating.

Trump wants to impose a new 60% tariff on all imports from China and a 10% tariff on all other imports. Since tariffs are taxes paid by Americans, that would raise a typical family’s costs by $1,700 a year, according to the Peterson Institute for International Economics. Shoppers would be spending more for the same stuff, which is basically what inflation is.

Trump also thinks the White House should have more control over the Federal Reserve, a prospect that would alarm financial markets if it ever happened. The Fed has a tough enough job as it is trying to keep inflation and employment at optimal levels, and political interference from the White House could make that a lot harder.

Trump in particular has pressed the Fed to lower interest rates, even though the standard playbook for bringing down inflation is raising rates to slow the economy. If Trump won a second term and tried to force his own agenda on the Fed, it could easily stoke inflation and undermine confidence in the US economy.

Trump also wants to extend a set of tax cuts from 2017 that are due to expire at the end of 2025. That would raise the national debt by $4 trillion to $5 trillion, something Trump doesn’t seem to care about. But markets do. At some point, excessive amounts of debt flooding the market becomes “money printing.” That's another factor that can fuel inflation.

Even though there are two major candidates, there are four possible outcomes for the 2024 election.

Trump or Biden could each win with their party gaining complete control of Congress, or they could win with a divided Congress. That’s important because it will determine if the president can exploit his party’s control of Congress to pursue a partisan agenda. If the opposition party controls at least one house of Congress, it can block many of the president’s preferred policies.

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But if Republicans gain full control, watch out.

“The upside risks to inflation appear larger under a Republican sweep,” Goldman advised. In addition to higher tariffs and more Fed-bashing under Trump, the investment bank points out that a Trump crackdown on immigration could trim the labor force, worsen labor shortages in some industries, fuel higher wages, and push prices up.

Another recent analysis by Moody’s Analytics reaches similar conclusions about the economy during a second Trump term. “The policies adopted under the Republican Sweep scenario result in higher inflation and weaker economic growth,” Moody’s Analytics found. That’s largely because new import tariffs and less immigration under Trump would force prices up and drag on growth.

In a May analysis, Oxford Economics found that new tariffs and other Trump policies could push the inflation rate a full percentage point higher than it would be without those efforts. Inflationary Trump policies could also compel the Fed to hold off lowering interest rates and maybe even raise rates further to head off new inflationary pressures. That would likely enrage Trump and possibly compel him to try firing Fed Chair Jay Powell, whose appointment lasts until 2026.

Voters who think back on Trump’s presidency as a time of low inflation might wonder how a second term could be so different. The answer is that the COVID pandemic and geopolitical events such as Russia’s invasion of Ukraine have transformed the economy and left far less margin for error.

The United States and other nations are now “re-shoring” supply chains for key categories of goods, which should make supplies less vulnerable to shocks but also raise costs. Labor shortages for much of the last three years have pushed wages up, another factor contributing to higher prices.

Global energy markets are also much tighter than they were before COVID. Back then, American drillers and OPEC oil nations were competing for market share by basically oversupplying the market. That kept prices low. But plunging demand during COVID led to massive losses and new “capital discipline” that prioritizes profits over share. Virtually no energy producer is willing to overproduce these days, for any reason.

While inflation soared under Biden, it’s heading back toward normal levels. Many economists expect more of the same should he win reelection: continued disinflation, eventual Fed rate cuts, predictable trade policies, and moderate growth. The ultimate status quo scenario is a Biden win with Republicans controlling at least one chamber of Congress, allowing them to block progressive Democratic legislation.

Biden's economic agenda is still a tough sell to voters, who sometimes have selective memories. Biden is battling a “Trumpnesia” phenomenon in which voters forget about Trump’s erratic handling of the COVID pandemic and other controversies and only remember that gasoline cost less than $3 per gallon. If there’s another Trump presidential term, it could generate very different memories.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.

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