Bridgewater Associates Co-Chief Investment Officer Bob Prince has expressed concerns that President-elect Donald Trump"s policies on tariffs, fiscal stimulation, and immigration could result in the U.S. failing to achieve its 2% inflation target.

Prince suggested that if inflation reaches 3% within the next 18 months, Trump might consider nominating a Federal Reserve chairman who would be more open to this higher target, potentially allowing for interest rate cuts. Prince emphasized the desire for lower interest rates but acknowledged that sustained inflation could pose a challenge.

He also highlighted the potential impact of a second Trump presidency, with its pro-business and pro-growth policies potentially driving up prices and limiting labor force expansion. These factors could lead to significant developments as Jerome Powell"s term as Fed Chair is set to expire in 18 months.