President Trump promised the voters that if he was chosen, he would issue guidelines that would reduce prices to “Day 1” in office.
But three weeks after his tenure, Mr. Trump's officials and the White House are more measured on how to discuss their efforts to count in inflation. They have started to downgrade the likelihood that consumer costs such as food and food will sink shortly, which reflects the limited performance that the presidents need to control prices. These are largely determined by the global economic forces.
The changing tone could enable Mr. Trump to reset the expectations of how quickly the prices will decrease if he pursues guidelines such as tariffs and tax cuts that, according to economists, could tighten inflation.
Mr. Trump and his advisors believe that the expansion of American energy generation and the revolution of the regulations will reduce the costs. They also argue that some of Mr. Trump's tax proposals, such as:
But in an interview this week Mr. Trump met when he pressed when families who had to deal with high prices would feel a certain relief. He suggested that his guidelines would make America a rich country that would theoretically increase consumers.
“I think we'll be a rich – look, we're not so rich at the moment,” said Trump in Fox News. “We owe $ 36 trillion. This is because we can take advantage of all of these nations. “
During a news information last week, Karoline Leavitt, the press spokesman for the White House, said Mr. Trump was doing everything to relieve the nation's living cost crisis. But when they were asked at what point the Americans would start to experience a relief of high consumer prices, she said: “I have no timeline.”
Vice President JD Vance also has expectations that consumer prices will decrease shortly.
“Rome was not built in one day,” Mr. Vance told CBS News last month and explained that “it will take a little time” before the purchase prices will decrease.
The pace in which food prices rise is considerably slower than a few years ago. At one point in 2022, when the recent inflation was in the worst case, these costs recorded an annual increase of almost 14 percent. From December, this category has only increased by only 1.8 percent in the past 12 months, according to the Bureau of Labor Statistics.
However, these cooling price gains do not mean lower prices. Most things are still more expensive than a year ago and some are much higher. Consumers have experienced a sticker shock when buying eggs, coffee or other staple foods.
From January, a dozen eggs amounted to an average of USD 4.95, compared to less than 3 US dollars a few months ago. Egg prices rose by almost 53 percent last year. And that will probably deteriorate in an outbreak of bird flu, which has led to an egg deficiency because the farmers swallow their herds to prevent the spread of the disease.
Popular restaurant chains such as Waffle House added egg surcharges, while grocery stores across the country have started how many eggs can be bought.
The inflation figures published on Wednesday showed that consumer prices increased unexpectedly and rose in January with an annual price of 3.0 percent. The core inflation, which excludes the volatile food and energy prices, rose by 3.3 percent annually. The prices also rose by 0.5 percent per month.
Mr. Trump accused former President Joseph R. Biden Jr. for the top price.
“Biden inflation on!” He wrote about the truth of social.
One of the greatest factors that heat up the increase was the cost of food at home, mainly eggs. The data showed that egg prices rose by 15.2 percent in January, the largest monthly increase since 2015. Egg prices made about two thirds of the entire monthly food increases at home in January.
Before the recent increase in food prices, the economists had already come to the fore of further flare -off of the prices, which resulted from Mr. Trump's tariffs. The president has imposed an additional 10 percent tariff on China and 25 percent tariffs for foreign steel and aluminum. While he temporarily held the ceiling tariffs in Canada and Mexico, this could ultimately come into force.
On the campaign path, Mr. Trump also provided a universal tax on all goods accessible to the United States, which, if it was enacted, would mark a sharp escalation of what he was pursuing during his first term. The president is now ready to impose “mutual” tariffs on the tariffs that have other countries on US exports.
Economists are worried about a situation in which a one-time price increases-at a time when inflation is higher than the goal of the Fed 2 percent, creates consecutive increases that create more inflation over time. Regardless of whether this result occurs, it mainly depends on how Mr. Trump structures his guidelines, the extent of retaliation measures from other countries and whether consumers withdraw the expenses as a whole.
When Mr. Trump started his first trade war in 2018, the Fed found that it was able to increase or ignore a temporary increase in prices for certain goods and services. At this point, inflation was far below the target of 2 percent and growth problems were of the utmost importance, which the civil servants finally lowered in 2019. With such a different inflation environment, the Fed may not have the same scope.
In a social media contribution on Wednesday morning, Mr. Trump said: “Interest rates should be reduced, which would go hand in hand with the upcoming tariffs !!!”
However, the FED has hardly given any signs that this remains only of minor signs of an impending recession and price pressure. In conversation with the legislators on Tuesday, Jerome H. Powell, the chairman, confirmed that the Fed did not have a “hurry” to reduce interest rates.
Many economists believed that Mr. Trump's promises to reduce consumer prices were unrealistic and that deflation, when prices are largely decreasing, would not be a sign of a healthy economy.
Measurements that follow up how consumers and companies think about future inflation tells a mixed picture of how concerned Americans are concerned at the moment.
A preliminary but often volatile advertisement published by the University of Michigan on Friday recorded the inflation expectations to 4.3 percent in February in February. The survey, which took place until February 3 from the day after Mr. Trump's inauguration, also showed an “omnipresent” slump in consumer mood, with Republicans, Democrats and independent declines registering.
A separate survey by the Federal Reserve Bank of New York, which was published on Monday, showed that in January there was no recognizable change in consumers about short -term inflation risks. Nevertheless, it showed that over a time horizon of five years, expectations rose a little to 3 percent. The political decision -makers focus on these long -term measures, which tends to reflect on future inflation developments.
A CBS News published this week showed that 66 percent of Americans believe that Mr. Trump is not doing enough to reduce prices.
Although it is still very early in Mr. Trump's term, the Democrats have emphasized signs of higher prices as a indication that the policy of the Trump government does not work.
“We see ourselves here an administration that campaigned to reduce prices and not to do that,” Powell, who said inflation remained a bit increased.