Trump says inflation was 'defeated.' Some economists disagree

Core Points - President Trump claimed victory over inflation, stating that the U.S. has "virtually no inflation" and that consumer prices are decreasing rapidly [2] - Federal data contradicts Trump's claims, indicating that inflation remains elevated, with the consumer price index at a 2.7% annual rate as of December 2025 [3] - Core CPI, which excludes volatile food and energy prices, is at 2.6%, indicating persistent inflation concerns for policymakers [4] Inflation and Tariffs - Trump's tariff policy is contributing to upward pressure on inflation, complicating claims of victory over inflation [5] - The average effective tariff rate in the U.S. is 17.5%, the highest since 1932, significantly up from around 2% at the beginning of 2025 [6] - Consumers are expected to pay an additional $1,300 to $1,700 in 2026 due to current tariff rates compared to pre-2025 levels [7] Consumer Price Trends - Mortgage rates have decreased to an average of 6.21%, down from over 7% in January 2025, translating to approximately $1,800 in annual savings on a $300,000 loan [10][11] - National rent index fell by 0.8% in December, with an overall decline of 1.3% year-over-year, now averaging $1,356 [12] - Car payments have increased, with the average monthly payment for new vehicles reaching $772, up from $754 at the end of 2024 [14][15] Energy and Grocery Prices - Gasoline prices have decreased by nearly 10% to an average of $2.81 per gallon since Trump took office [16] - Electricity prices have surged nearly 7% over the past year, driven by increased demand from data centers [18] - Grocery prices have risen by 2.4% year-over-year, with specific items like beef and coffee seeing significant price increases of 16% and 20%, respectively [19][20] Airfare Trends - Airline fares have declined by more than 3% year-over-year, supported by lower jet fuel prices [21][22] - The price data does not account for ancillary fees, which can significantly impact travelers' budgets [23]