economy
January 21, 2026
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.
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