Biden’s gone, but inflation may well have been liberated on ‘liberation’ day.

The disruption caused by the Trump tariffs is going to mean price increases. That’s not going to play well. Back a long, long, long time ago, Donald Trump was elected partly because of the surge in prices that marked Biden’s time in office. The Biden administration attempted to deflect the blame for the inflation that marked its term with allegations of price gouging and ‘greedflation.’ FTC investigations were set in motion. Lina Khan, the FTC chairwoman, a progressive, was happy to oblige. That she is also something of a heroine of ‘Khanservatives’ ought to merit more attention than it gets.

So here we are in April 2025, Biden’s gone, but inflation may well have been liberated on ‘liberation’ day.

And here’s a tweet from the new FTC chairman:

President Trump is reorienting our nation’s economy to put Americans first. As we adjust to the new economic order, the @FTC will be watching closely to make sure American companies are vigorously competing on prices. These necessary tariffs should not be interpreted as a green light for price fixing or any other unlawful behavior. We will always protect American consumers.

At one level, the tweet is unexceptional. Whether or not the FTC should exist in its current form (a different discussion), its job remit will indeed relate to keeping an eye on what’s left of price competition after the Trump administration has hobbled it with “necessary” tariffs. In that sense, therefore, the FTC sending out such a reminder is no big deal.

But there is a more pessimistic interpretation (full disclosure: I am not known for my sunny optimism). By tweeting out a warning (“@FTC will be watching closely”) at this time to American companies, many of which will soon be struggling to adapt to what are likely to be severely disrupted supply chains, the FTC is transmitting an unmistakable signal.

For many businesses, that rearrangement of supply chains will mean that their costs will increase. If that occurs, their margins will be depressed, leaving them with less money to innovate, invest, hire, pay their workers, and reward their shareholders. Alternatively, they can offset those cost increases by passing them on, in whole or in part, to their customers. That won’t be an easy calculation. Hike the prices too much, and their customers, who may be under pressure due to other tariff-generated price increases, may go away. Hike the prices by too little, and the business takes a hit. And now, those businesses (or at least, I imagine, larger businesses) will have to contend with the fact that the FTC may be second-guessing their pricing decisions.

Even if those decisions are perfectly justifiable, being investigated by the FTC is (as the Biden administration knew and exploited) expensive and time-consuming, facts which will mean that businesses opt to increase their prices by less than they need, and pay for the hit to their margins by, say, hiring less and firing more. Alternatively, they may decide that a given product or line of business is no longer worth pursuing. That could mean layoffs, and if enough companies follow suit in the same areas, it could mean shortages. And what happens when there are shortages? Prices rise.

The second reason for sending out a tweet like this is to borrow from the Biden playbook and participate in a wider effort by the administration to prepare the ground for a revived greedflation narrative.

Or perhaps I am just being a pessimist. Time will tell.