Trump says inflation isn’t his No. 1 issue. So what will happen to…
WASHINGTON – Two months ago, in his first network television interview after the election, Donald Trump stated that he owed his victory to Americans’ anger over immigration and inflation, particularly the rising cost of groceries. He remarked, “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.” He promised, “We’re going to bring those prices way down.”
However, in Trump’s first week back in the White House, his initial executive actions focused little on tackling grocery prices directly, instead directing federal agencies to start pursuing appropriate actions. His attempts to lower energy costs are intended to have broader economic benefits. Nonetheless, his primary focus has been on immigration, which he referred to as his primary issue shortly after taking office.
Trump expressed, “They all said inflation was the No. 1 issue. I said, ‘I disagree.'” He acknowledged that he discussed inflation but questioned how often one could mention that the price of apples had doubled.
The former president seems confident that voters will continue to blame high prices on former President Joe Biden. His statements reflect the challenging reality that presidents have limited control over quickly reducing inflation without negatively impacting other aspects of the economy.
On energy, Trump is advocating for reduced regulations and an increase in land available for drilling. He is also attempting to convince domestic and foreign oil producers to increase production potentially at the cost of their own profits.
During a rally in Las Vegas, Trump criticized Biden for allowing prices to rise and pledged to resolve the issue swiftly. “When I think of Biden, I think of incompetence and inflation,” he stated.
Inflation recently peaked at a 9.1% annual rate in June 2022 amid worldwide supply chain issues following the economic fallout from the COVID-19 pandemic. Although consumer prices have decreased since then, they have risen slightly recently, from 2.4% in September to 2.9% in December, according to the latest figures. Economic experts have warned that Trump’s proposals for tariffs and tax cuts could inadvertently lead to new inflationary pressures and keep interest rates elevated.
In a recent interview, Vice President JD Vance defended the administration’s progress, suggesting, “Prices are going to come down, but it’s going to take a little bit of time, right?” He concluded, “Rome wasn’t built in a day.”
Trump’s shift away from addressing costs directly may create an opportunity for Democrats to argue that he is not assisting working-class voters, a narrative that could facilitate their return to power in Washington.
Senator Chris Murphy commented that Trump tends to distract from inflation with discussions of unrelated topics, suggesting that this serves to divert attention from an economic agenda that does little to lower costs.
During an interview on Fox News, host Sean Hannity attempted to steer Trump towards discussing the economy but felt rushed to cover the subject. “Let me get to the economy,” he said, to which Trump replied insistently, “The economy is going to do great.”
When discussing inflation, Trump highlighted its low levels during his administration and claimed that if he had been president after the 2020 election, prices would not have surged, despite the fact that rising inflation was a global trend following the pandemic.
It remains uncertain how Trump plans to urge oil companies and foreign nations to quickly increase production, potentially sacrificing their profits. The Energy Information Administration indicated that domestic oil production had risen at an annual rate of approximately 8.4% over the past two years, averaging nearly 13.5 million barrels per day in October. Some Trump aides believe production could increase by an additional 3 million barrels daily.
Achieving such a significant increase in production within a year would necessitate substantial alterations in the global market. The International Energy Agency predicts an increase in global oil supply by 1.8 million barrels per day to 104.7 million barrels daily. Notably, Trump has shown opposition to renewable energy solutions, which puts additional strain on the U.S. economy’s reliance on fossil fuels.
EJ Antoni, a research fellow at a conservative think tank, stated that any increase in energy production under Trump would ultimately lead to lower prices across the economy. He explained, “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.”
However, some aspects of Trump’s proposals could unintentionally lead to higher prices. For example, detaining immigrants may limit the availability of lower-wage workers, while tariffs on imports could escalate costs for consumers.
Trump indicated that his strategy might involve publicly pressuring the Federal Reserve to reduce interest rates. He remarked in Davos that he would “demand” lower rates from central banks, contrasting with Biden’s viewpoint that the Fed’s independence is crucial for ensuring stability in prices. The Fed began raising benchmark rates in 2022 to make borrowing more expensive, effectively alleviating some inflationary pressures, allowing them to reduce rates late last year. Trump believes that increased oil production could empower him to compel the Fed to take action. When asked if he anticipated the Fed would heed his requests, he confidently replied, “Yeah.”
