President Donald Trump made a bold campaign promise to lower prices on Day One of his presidency. However, as of Day 24, the reality for many Americans is far from that promise. Inflation has not only failed to decrease but has actually risen, with prices for everyday items like eggs and fuel surging. The Bureau of Labor Statistics reported that inflation rose by half a percentage point last month, marking the biggest monthly increase since August 2023. Year-over-year, prices were 3% higher, the first time they’ve reached that level since June 2024. While much of the blame for the recent inflationary pressures can be attributed to the policies of former President Joe Biden, who was in office for 19.5 of the 31 days covered by the report, the trend shows that prices are not falling under Trump’s leadership—they’re actually rising faster. This creates a challenging political landscape for the new president, as Americans are beginning to associate the inflationary pain with his administration.
Trump’s campaign promise to lower prices was likely doomed from the start, as no president has the ability to single-handedly dictate price reductions. External factors, such as rising oil prices due to geopolitical tensions in the Middle East and sanctions on Russia and Iran, have contributed to the surge in inflation. Additionally, the avian flu outbreak has led to a 15% increase in egg prices, the largest spike since June 2015. These external shocks are beyond the control of any administration, and Trump’s luck hasn’t been on his side. However, inflation isn’t just affecting volatile categories like food and fuel; prices across the board have risen, making it impossible to spin the situation positively. January’s inflation report was undeniably bad, and Trump is increasingly being held accountable for the high prices.
Despite the unfavorable economic conditions, Trump has unveiled a four-part strategy to tackle inflation and lower prices for American consumers. The plan includes cutting taxes to incentivize businesses to operate within the U.S., raising tariffs on foreign goods to generate revenue and encourage domestic manufacturing, increasing oil production to reduce energy costs, and cutting government spending to lower interest rates. A key component of this strategy is the work of Elon Musk’s Department of Government Efficiency, which has reportedly identified $40 billion in spending cuts. Kevin Hassett, a White House economic adviser, emphasized that the administration is focused on controlling spending while implementing tax cuts and regulatory changes to boost supply and reduce demand. Additionally, the administration is working on a plan to address the avian flu crisis that has disrupted egg supplies, though specific details remain scarce.
While some aspects of Trump’s plan may have an immediate impact, such as the slight drop in mortgage rates due to falling 10-year Treasury yields, other elements are either unproven or unlikely to succeed. For instance, cutting taxes could save Americans money in the short term, but it may also lead to higher loan rates and a widened deficit. The 2017 corporate tax cuts under Trump’s first term provided a temporary economic boost but failed to offset the long-term revenue losses. Furthermore, the math behind Trump’s plan to fund tax cuts with tariff revenue and spending reductions doesn’t add up. analyst estimates suggest that the tax cuts could cost between $5 trillion and $11 trillion, far outweighing the revenue generated by tariffs. Musk’s ambitious goal of $1 trillion in spending cuts would likely require slashing popular programs like Medicare and Social Security, which could face significant legal and political challenges.
Mainstream economists and policy experts have expressed skepticism about the effectiveness of Trump’s strategy. While tax cuts could be passed through budget reconciliation with Republican support, there is already internal disagreement among Senate and House Republicans about the best approach. Tariffs, another key component of the plan, are widely criticized for ultimately harming American consumers, as the costs are passed down through higher prices. Additionally, Trump’s energy plan faces significant hurdles, as global demand for oil is weak, and U.S. production is already at historic highs. Energy companies are not clamoring for new drilling leases, as evidenced by the lack of bids for Alaska’s recent wildlife refuge drilling auction. Perhaps most importantly, Trump’s ability to influence interest rates is limited, as the Federal Reserve operates independently. While Trump has called for lower rates, the Fed is unlikely to comply given the recent inflation numbers, which show no signs of abating.
The political implications of Trump’s struggle to control inflation are significant. A recent CBS poll found that nearly two-thirds of Americans believe Trump hasn’t focused enough on reducing inflation, and a University of Michigan survey revealed that consumers’ expectations for inflation over the next year have surged. These findings suggest that the public is losing confidence in Trump’s ability to deliver on his economic promises. With the 2024 election approaching, the administration’s failure to curb inflation could become a defining issue for Trump’s presidency. While Trump’s team remains optimistic about their strategy, the challenges ahead are daunting, and the ultimate success of his policies remains uncertain. For now, Americans are left to navigate a landscape of rising prices, wondering if Trump’s promises of relief will ever materialize.
