Productivity is surging in America, which will likely mean subdued inflation even while wages rise and rapid economic growth continues. We can add to this the One Big Beautiful Bill’s tax incentives for capital investment. Making 100 percent expensing for capital expenditures permanent has likely encouraged companies to invest more heavily and to adopt business models built around capital investment rather than payroll expansion. The old tax rules made capital investment costly by only allowing deductions spread over several years while labor costs were immediately deductible. Trump’s immigration and tariff policies in the second term are doubling down on these.