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Why Trump’s Policies Could Fuel Inflation
By Validus - 15 October 2025
Kambiz Kazemi, Chief Investment Officer
Summary
In this interview, Kambiz Kazemi, CIO at Validus Risk Management, talks about why some of Trump’s policies could lead to higher inflation in the U.S. He explains how tariffs, changes in the labor force and fast-moving political decisions can affect markets, and what investors should keep in mind in what he calls the “Trump world.” Kambiz also shares his view on the current state of the equity market and the sectors that may offer interesting opportunities in a more selective, stock-picker style environment.
Takeaways
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Tariffs under a Trump administration could raise inflation, depending on how they’re applied and which sectors they target.
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Deportation policies that reduce the labor force could push wages higher, adding more inflation pressure.
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Investing in a “Trump world” means focusing on sectors tied to an America First agenda, such as energy, defense, AI, and semiconductors.
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Investors should be ready for sudden policy changes and aim for positions that can withstand shifting rules.
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A constant sense of political showmanship may create more market volatility, so managing risk becomes more important.
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After strong gains in recent years, equity markets may have limited broad upside and could become more of a stock picker’s market.