- Americans disagree with Trump’s claim of defeating inflation
- Ignoring inflation is a big risk as it remains above the Fed’s 2 percent target
Inflation in the United States has risen in three of the past four months and is slightly higher than a year ago, when inflation helped sink then-Vice President Kamala Harris’ presidential campaign.
Yet listening to Donald Trump and some of the Federal Reserve’s anti-inflationists, you wouldn’t think inflation is high. Trump told the United Nations General Assembly late last month that grocery prices had fallen and that inflation had been defeated.
In a high-profile speech in August, Federal Reserve Chairman Jerome Powell said that inflation, while still somewhat high, was still somewhat high. The pandemic has eased from its peak.
The upside risk to inflation has diminished. Still, ignoring or underestimating inflation while it is still above the Fed’s 2 percent target poses a significant risk to the White House and the Federal Reserve.
The survey found that many Americans still see high prices as a burden on their finances.
The Fed may be taking an even bigger gamble. It cut its key interest rate on the assumption that the Trump administration’s tariffs will temporarily boost inflation.
