Trump used to say on the campaign trail that the markets were going up and inflation was coming down in anticipation of his arrival to save the country. Guess what?
Inflation heated up more than expected in January, as prices for groceries, housing and energy all picked up for Americans in early 2025, potentially complicating President Donald Trump’s agenda.
A key gauge of inflation — the consumer price index — showed Wednesday morning that prices rose by 3.0 percent in January from a year earlier, according to the Labor Department. That’s hotter than the 2.9 percent annual gain reported in December, underscoring economic concerns of Americans who voted out incumbents in federal elections last fall…
Wednesday’s data showed that consumer prices rose 0.5 percent on a monthly basis from December, the biggest increase since August 2023. Shelter costs, which grew 0.4 percent, accounted for nearly 30 percent of the monthly gain.
I’m going to guess that all this talk of tariffs has prices going up in anticipation of whatever daft declaration he’s going to make next. Certainly, calling for 25% tariffs on Canadian lumber and instigating a campaign of terror on the workers who make up most of the housing construction force in the country hasn’t helped either.
Stocks on Wall Street slumped at the start of trading on Wednesday, dragged lower by data that showed consumer prices rose more than expected in January, leaving the Federal Reserve little cause to lower interest rates again soon.
The S&P 500 fell roughly 1 percent as trading got underway. The Nasdaq Composite index, which is chock-full of tech stocks that have come under pressure recently from rising global competition to develop the chips that will power the development of artificial intelligence, also fell around 1 percent.
Oops:
Jim Farley, the CEO of Ford, said President Donald Trump’s latest tariffs on Mexico and Canada could deal a serious blow to his company and the auto industry. Farley, who was speaking at a conference organized by Wolfe Research in New York on Tuesday, said that while Trump has talked about making the “US auto industry stronger,” the president’s trade policies would hit Ford hard. “So far, what we are seeing is a lot of cost and a lot of chaos,” Farley told conference attendees.
President Trump promised voters that, if elected, he would enact policies that would bring prices down on “Day 1” in office.
But three weeks into his term, Mr. Trump and White House officials have become more measured in how they discuss their efforts to tame inflation. They have begun downplaying the likelihood that consumer costs like groceries will decline anytime soon, reflecting the limited power that presidents have to control prices. Those are largely determined by global economic forces.
It’s all going very well. Eat those omelettes, folks. Nothing to see here.