Trump says inflation isn’t his No. 1 issue. So what will happen to consumer prices?
WASHINGTON — Two months ago, in his first network television interview after the election, Donald Trump claimed his victory was due to Americans’ frustrations over immigration and inflation, particularly the rising cost of groceries. He noted how prices for everyday items had surged dramatically.
“When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time,” Trump stated during his appearance on NBC’s “Meet the Press”. “And I won an election based on that. We’re going to bring those prices way down.”
However, Trump’s first week back in the White House showed limited immediate action on consumer prices. His initial executive orders did little beyond instructing federal agencies to take “appropriate actions” in this area. Trump’s primary focus during this time seemed to be on immigration, which he labeled as his “No. 1 issue” shortly after taking office. He did initiate some measures aimed at reducing energy costs, which he believes could have broader economic benefits.
Despite the pressing concerns surrounding inflation, Trump expressed skepticism about its status as the leading issue. “They all said inflation was the No. 1 issue. I said, ‘I disagree,'” Trump remarked. “I talked about inflation, too, but how many times can you say that an apple has doubled in cost?”
Trump appears to be counting on voters to attribute high prices more to the actions of former President Joe Biden rather than his own policies. His comments reflect a broader understanding that presidents have limited tools to combat inflation swiftly without risking negative repercussions elsewhere in the economy.
Trump seems to view energy policy as a significant area for potential improvement. He is advocating for reduced regulations and increased land availability for oil drilling. His strategy includes encouraging both domestic and foreign oil producers to consider raising output, potentially at the expense of their profits.
During a rally in Las Vegas, Trump criticized Biden’s handling of inflation, taking aim at rising prices. “When I think of Biden, I think of incompetence and inflation,” he declared.
Inflation peaked at a staggering 9.1% annual rate during June 2022, largely due to global supply chain issues stemming from the COVID-19 pandemic. While overall consumer prices decreased in the following months, there has been a slight uptick in recent figures, with inflation increasing from 2.4% in September to 2.9% in December. Analysts caution that Trump’s proposed tariffs and tax reductions might inadvertently drive inflation higher and sustain elevated interest rates.
Vice President JD Vance defended the achievements of the current administration during an interview, asserting, “Prices are going to come down, but it’s going to take a little bit of time, right? Rome wasn’t built in a day.”
Trump’s notable shift away from a focus on inflation could provide Democrats with an opportunity to claim he is neglecting the concerns of working-class individuals, a strategy that might aid them in regaining political influence.
Senator Chris Murphy, D-Conn., commented on Trump’s tendency to divert attention from economic issues, saying, “It’s catnip and it causes everybody to stop paying attention to their actual economic agenda, which has nothing to do with lowering costs and everything to do with rigging the economy to help the Mar-a-Lago crowd.”
In a recent interview on Fox News, host Sean Hannity struggled to keep Trump focused on economic matters. “Let me get to the economy,” Hannity urged. “I’m running out of time.” To which Trump confidently responded, “The economy is going to do great.”
When Trump did address inflation, he harkened back to the lower rates during his presidency, contending that prices wouldn’t have soared if he had remained in office after the 2020 election, despite acknowledging that increased inflation was a global phenomenon post-pandemic. However, it remains uncertain how he would incentivize oil companies and foreign nations to boost production without sacrificing their profit margins.
The Energy Information Administration reported an annual growth rate of domestic oil production at roughly 8.4% over the past two years. This brought the average output to nearly 13.5 million barrels a day as of October. Some aides to Trump believe that production could potentially increase by an additional 3 million barrels a day; however, achieving such levels in a single year would be challenging without significant shifts in the global market.
The International Energy Agency projects that the global oil supply will increase by just 1.8 million barrels per day to reach 104.7 million barrels daily. Trump has also expressed his opposition to more environmentally friendly energy alternatives, adding pressure on the U.S. economy to rely on fossil fuels.
EJ Antoni, a research fellow at a conservative think tank, remarked that an increase in energy production could ultimately lead to lower prices across the economy. “If you’re going to bring down the cost of energy, you’re going to bring down the cost of all kinds of goods and services,” he concluded.
