There hasn't been much discussion of another reconciliation bill recently, so this is incremental. Trump is getting hammered on cost of living concerns. There are three directions he can take. 1. Biden Mode: Dig his head in the sand and make the case that the electorate is wrong. 2. Volcker Mode: Turn turbohawkish and crush inflation, at the cost of hitting economic growth and financial markets. While this is the only correct option, the issue is the pain is immediate while benefits could take years to materialize. Trump's focus is on the mid-term elections next year, and in any case, he has proven many times to be operating on a short time horizon. 3. Ponzi Mode: Give more handouts to make the people happy. This worsens inflation in the long run, but it helps the symptoms (lower approval ratings) in the near term. These Hassett comments suggest that they are going for #3, and of course, this is consistent with the Trump that we know. In addition, Trump made comments in his interview with Politico today that he will be looking to do more targeted rollbacks of tariffs, to ease cost of living concerns. The environment next year is going to get looser. Late 2025 was peak fiscal contraction, on Jan 1 we automatically get the OBBBA provisions, and then we will continue to get more tariff rollbacks, and we will get a new reconciliation bill.