Trump says inflation was 'defeated.' Some economists disagree
President Donald Trump said the U.S. "defeated" inflation and reined in consumer prices over the past year. Federal data suggests otherwise.
TL;DR
- President Trump claimed victory over inflation during a speech in Davos, Switzerland, stating that prices for groceries, energy, airfares, mortgages, rent, and car payments are decreasing.
- Federal data shows the consumer price index (CPI) at a 2.7% annual rate in December, which economists consider elevated.
- Core CPI, excluding volatile food and energy prices, is at 2.6%, deemed 'uncomfortably high' by economists.
- Economists suggest Trump's tariff policies are increasing inflation, with the U.S. effective tariff rate at its highest since 1932.
- While mortgage rates and rents have generally trended lower, car payments have increased due to higher financed amounts.
- Energy prices, specifically gasoline, have declined, but household electricity prices have surged.
- Grocery prices have risen moderately, though specific items like beef and coffee have seen significant price hikes.
- Airfares have declined according to CPI data, but additional charges may increase actual travel costs for consumers.