{"id":396,"date":"2025-02-12T20:19:02","date_gmt":"2025-02-12T20:19:02","guid":{"rendered":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/2025\/02\/12\/trump-has-a-plan-to-lower-inflation-its-just-delayed-cnn\/"},"modified":"2025-02-12T20:19:02","modified_gmt":"2025-02-12T20:19:02","slug":"trump-has-a-plan-to-lower-inflation-its-just-delayed-cnn","status":"publish","type":"post","link":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/2025\/02\/12\/trump-has-a-plan-to-lower-inflation-its-just-delayed-cnn\/","title":{"rendered":"Trump has a plan to lower inflation. It\u2019s just delayed – CNN"},"content":{"rendered":"
\"A<\/picture> <\/div>\n
\n

<\/span> CNN<\/span> \u00a0\u2014\u00a0 <\/cite> <\/p>\n

President Donald Trump made a campaign promise to lower prices on Day One<\/a>. Well, it\u2019s Day 24, and as anyone who has gone shopping for eggs lately knows: Prices aren\u2019t any lower than they were on Inauguration Day. <\/p>\n

In fact, inflation rose much more than expected last month, the Bureau of Labor Statistics reported Wednesday \u2013 rising another half percentage point last month overall, buoyed by surging fuel and egg prices. It was the biggest monthly increase since August 2023. And prices were 3% higher year-over-year for the first time since June 2024. <\/p>\n

Yes, Joe Biden was president for 19 \u00bd of the 31 days the report covers, so much of America\u2019s renewed inflation pain rests on the former president\u2019s shoulders. But the bad inflation report also depicts a difficult political reality for the new president: Prices aren\u2019t falling now that Trump is in office; they\u2019re actually rising faster. <\/p>\n

Trump\u2019s campaign promise was doomed to be broken from the moment he made it. No president can wave a magic wand to lower prices, and for that matter, Trump has been unlucky: Oil prices have been on the rise on concerns about tensions in the Middle East and on sanctions against Russia and Iran. And avian flu sent egg prices more than 15% higher last month<\/a> \u2013 the biggest surge since June 2015. <\/p>\n

Prices were up across the board last month, though \u2013 not just those volatile and hard-to-control categories like food and fuel. There\u2019s no way to spin this; January\u2019s inflation report<\/a> was just plain bad, and Trump is starting to own high prices. <\/p>\n

A CBS poll<\/a> this week showed that nearly two-thirds of Americans think Trump hasn\u2019t focused enough of his policies on reducing inflation. And a University of Michigan consumer survey released Friday showed that Americans\u2019 inflation expectations for the year ahead surged this month. <\/p>\n

Trump does<\/em> have a strategy to lower inflation, though. The president has spelled out a four-part plan to get prices down for American consumers. <\/p>\n

1) Lower taxes within America\u2019s borders, incentivizing companies to do business there. <\/p>\n

2) Raise taxes on businesses outside of America (that is, tariffs<\/a>), bringing in revenue that will both pay for the lost proceeds from lower tax rates and drive more American manufacturing to grow the economy. <\/p>\n

3) Produce more oil to lower energy costs to defeat inflation. <\/p>\n

4) Cut spending, primarily via Elon Musk\u2019s Department of Government Efficiency, to lower interest rates to reduce costs for businesses and consumers. <\/p>\n

Kevin Hassett, a White House economic adviser, told CNN Wednesday that Trump is already taking action on prices. For example, he claimed DOGE found $40 billion worth of spending to cut, although that amount remains hard to verify. <\/p>\n

\u201cWe\u2019re focusing on getting spending under control and having supply-side tax cuts and regulatory policies and drilling and so on, so that there\u2019s a lot of supply-reduced demand,\u201d he said. \u201cThat\u2019s how you get prices down at the more macroeconomic level.\u201d <\/p>\n

Hassett also noted that the administration is working on a plan to combat the avian flu that has disrupted egg supplies and driven prices higher, although he didn\u2019t share any specifics. <\/p>\n

At least one of those policies can have and appears to be having an immediate impact on consumers. For example, the 10-year US Treasury yield has fallen since Trump was inaugurated, partially in anticipation of spending cuts, helping to lower mortgage rates a tad \u2013 from just above 7% on average the week before he took office to just under 6.9% last week. <\/p>\n

But other policies either haven\u2019t been introduced or aren\u2019t working \u2013 at least not yet. Remember: Just because Trump has a plan doesn\u2019t mean it will work. Biden spent most of the past two years working to fight inflation, but it was ultimately the Federal Reserve\u2019s historically high interest rates that brought inflation down from 40-year highs. <\/p>\n

Mainstream economists and policy experts remain dubious about Trump\u2019s plan. <\/p>\n

Cutting taxes could be done with a simple majority of Republicans through a process known as budget reconciliation. But there\u2019s already infighting and a disagreement between Senate and House Republicans about the best approach to take on tax cuts. So the timing and scope remains unclear.<\/strong> <\/p>\n

And though tax cuts could save Americans money in their take-home pay, they could ultimately raise loan rates. For example, Trump\u2019s 2017 corporate tax cuts gave the economy a boost, raising wages and productivity, but the benefits were not nearly enough to offset the losses in tax revenue that have widened the US deficit, according to an analysis<\/a> from Chicago\u2019s Booth School of Business. <\/p>\n

Trump plans to pay for tax cuts with tariff revenue and by cutting government spending. But the math doesn\u2019t add up. The Committee for a Responsible Federal Budget last week estimated Trump\u2019s tax cuts would cost between $5 trillion and $11 trillion. Even if Trump enacts his most aggressive tariff plan, the expected revenue would be in the hundreds of billions of dollars. Elon Musk has recently said he is targeting $1 trillion in spending cuts \u2013 an incredibly high number that would likely involve cutting popular social services like Medicare and Social Security. And the timing of when those savings could be realized remains unknown because of mounting legal challenges \u2013 and much of the money for contracts that were eliminated may have been allocated already. <\/p>\n

So if Trump gets his tax cuts through, the government will almost certainly have to borrow even more money in the form of Treasury bonds. That will flood the market even more with bonds, reducing their price and sending yields higher. And yields are pegged to all kinds of consumer loan rates, including mortgages. <\/p>\n

Tariffs themselves <\/strong>present a problem: Mainstream economists agree that American importers, not foreign exporters, pay their costs. That means those costs get passed on to American consumers<\/a>, which can reignite inflation and hurt the economy. <\/p>\n

And Trump\u2019s energy plan is also problematic: He can open up as many oil fields and offshore sites for drilling as he wants \u2013 it will remain hard to pump more oil. Demand is weak<\/a> around the world, as economies, particularly China, struggle with inflation and slow growth. Meanwhile, the United States is already producing more oil now than any other country at any other time<\/a>. Energy companies are not clamoring for new oil drilling leases, as evidenced by Alaska\u2019s recent wildlife refuge drilling auction receiving zero bids. <\/p>\n

Lastly, Trump\u2019s demand that interest rates fall is something largely outside of his control. On Wednesday, Trump posted on Truth Social, \u201cInterest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!! Let\u2019s Rock and Roll, America!!!\u201d <\/p>\n

Trump didn\u2019t specifically mention the Federal Reserve, and Hassett suggested Wednesday that Trump was pushing to lower the 10-year Treasury yield rate (which, as noted above, could be complicated by tax cuts). <\/p>\n

But Trump has repeatedly tried to exert more direct control over the Federal Reserve\u2019s interest rate decisions and has called out Jerome Powell, the Fed chair Trump appointed in his first term, for not lowering interest rates faster. Trump has repeatedly denied<\/a> speculation that he would try to fire Powell. <\/p>\n

The Fed may ultimately reduce rates whether or not Trump wants it to. But with inflation numbers like Wednesday\u2019s report, it\u2019s not looking likely anytime soon. <\/p>\n

CNN\u2019s Elisabeth Buchwald contributed to this report. <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

CNN \u00a0\u2014\u00a0 President Donald Trump made a campaign promise to lower prices on Day One. Well, it\u2019s Day 24, and as anyone who has gone shopping for eggs lately knows: Prices aren\u2019t any lower than they were on Inauguration Day. In fact, inflation rose much more than expected last month, the Bureau of Labor Statistics […]<\/p>\n","protected":false},"author":1,"featured_media":397,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-396","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/posts\/396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/comments?post=396"}],"version-history":[{"count":0,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/posts\/396\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/media\/397"}],"wp:attachment":[{"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/media?parent=396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/categories?post=396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wpinitiate.com\/echo-test\/demo973e36f5\/wp-json\/wp\/v2\/tags?post=396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}