If President Donald Trump was elected a particular order, it was to lower the price. Polls after the polls revealed that inflation is the most worrying thing for Americans. Therefore, the administration should be concerned that it is etched by the moment. Furthermore, although it appears that the President believes that the Secretariat’s order can unilaterally resolve all issues, he soon discovers that he needs Congress’ help to conquer inflation.
Today’s increased inflation is not Trump’s fault. When inflation first surged a few years ago, the Federal Reserve claimed it was under control for months and was on its way back to its 2% target. This September, when the Fed began cutting at a time when it had increased by 100 basis points, it hadn’t arrived there yet. Currently, inflation in the Core Consumer Price Index (CPI) remains at 3.3% year-on-year, 65% higher than the pre-Obstetric and Gynecological Standards standard.
At the current rate, the dollar will lose 33 cents of purchasing power within 10 years. This is not a temporary inconvenience. It is a fundamental betrayal of the healthy money principle. While the wealth of Americans who save dollars will melt away, those whose assets are bulging by simple money policies continue to benefit.
This issue is not just about commonly cited CPIs. Also, the flashing warning sign is the producer’s price index that tracks wholesale prices. In January, the year-on-year increase increased by 3.5% from the lowest in January 2024. Producer prices lead consumer prices.
The price rise should warn the Fed that inflationary pressure is being built again, but policymakers have preceded interest rate cuts. They didn’t seem to deal with the economic foundation. They were meeting Wall Street’s demands for simple money.
The worsening fiscal outlook, which Congress primarily owns, does not even help fight inflation. The Congressional Budget Office’s 10-year forecast from January shows national debt, which is an increase of $23.9 trillion over the next decade. The House Republican budget recently adds another $4 trillion, with only a portion of which offsetting investment-driven economic growth.
Lots of borrowing means that the interest costs on national debt are high. This has already skyrocketed and is projected to soon exceed $1 trillion a year. As John Cochran, the economist at the Hoover facility, pointed out, when the Fed raises interest rates to combat inflation, it also raises these interest costs on debt.
This causes financial problems. Unless Congress cuts spending, increasing interest payments will require more borrowing, increase budget deficits and undermine the Fed’s efforts to contain inflation.
This dynamic is unfolding now. If that continues, the Fed could ultimately be forced to further its rate reduction and push rate. The cycle repeats quickly as many of our debts mature in the short term.
But is the government’s efficiency department not dealing with excessive spending? If it successfully routes fraud and inappropriate payments, it can create more than just a symbolic dent. However, if qualification spending is not led to a sustainable level, it is still insufficient.
Furthermore, if Trump and Elon Musk are serious about sending people’s checks based on the discovery of Savings Doge, there’s an extra cash in our pocket, and a complete disregard for our growing deficit can inflame inflation like the Biden Era’s exciting money of the past.
Several other policies in which the president deserves more control or influence. Of course, Trump’s trade policy could hinder the fight against higher prices. First, customs duties directly increase the price of items being collected. They also make life in manufacturing more difficult, as most of what we import is an input for domestic production. Moreover, as experienced in the first Trump presidency, the risk of retaliation by trading partners is genuine.
The number of people whose consumers feel a trade-driven price rise depends on whether the administration is successful in other aspects of its agenda. If Trump succeeds in deregulating the economy (particularly in the energy and artificial intelligence industries), the resulting boom will overwhelm the negative effects of tariffs. The same applies to designing tax policies with Congress that truly promotes investment. However, unlike customs duties, these results are difficult to deliver.
America can’t afford another decade of artificial boom and painful busts. Responsible financial and fiscal policy time is before inflation and debt rise again. Trump’s actions are very important, but Congress needs to do its job. Otherwise, he will not be able to fulfill his promise to Americans to lower prices.
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