Thread 1447272

https://fortune.com/2025/10/12/trump-inflation-why-coffee-groceries-so-expensive-tariffs/

Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.

Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”

And at a high-profile speech in August, just before the Fed cut its key interest rate for the first time this year, Federal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”

Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2% poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.

The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong — if inflation gets worse or remains elevated for longer than expected — the Fed’s inflation-fighting credibility could take a hit.

That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps — such as demanding sharply higher pay when prices rise — that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.

But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.

“If that proves to be the case, in hindsight it will be that the Fed cuts — and I do expect several more — are going to be seen as a mistake,” Dynan said.

So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1% peak three years ago. Still, consumer prices increased 2.9% in August from a year earlier, up from 2.6% at the same time last year and above the Fed’s 2% target.

The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.

Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2% in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.

The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7% in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21% in the past year, partly because Trump has slapped 50% import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests.

Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.

But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.

“It is a big gamble after what we’ve been going through … to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3% inflation) would have been considered really high.”

Just two weeks ago, Trump slapped new tariffs on a range of products, including 100% on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, and 25% on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.

Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”

Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10% this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45% of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.

Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145% earlier this year. Production resumed after Trump reduced the duties to 30% but at a slower pace.

Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.

“At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”

Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.

“The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”

Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.

“I’m more sanguine about the inflation outlook than a lot of other people are,” he said.

Inflation went down just because we stopped giving Ukraine 100 billion every month

>>1447280
We never did that and it has nothing to do with inflation anyway.

>>1447272 (OP)
>Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”
He just says shit like this. Like...no. That's not true. Prices are not down, rates are not down, inflation is still high, you haven't done shit.

>>1447315
Maybe they are, maybe they aren't.
We can't know because Republicans decided to shut down the government the day before the Bureau of Labor Statistics was supposed to release September's unemployment and inflation reports, and have been using the shutdown as an excuse not to publish them.
Though we do know that August saw the highest unemployment and inflation levels since Trump got back in office.
Source:
https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm

>>1447315
It's almost like he's a compulsive liar.

>>1447272 (OP)
I think Republicans know inflation is a problem... but they can't do shit about it. Because admitting it's a problem would be going against Dear Leader's words.

And that's the central fucking issue of this admin; if Trump claims a problem is solved, no one in the republican party can admit it isn't. When Trump claims gas prices are below $2, now no one can talk about gas prices even though that's not true, because anyone who contradicts him gets blasted. When Trump claims Tom Homan didn't accept a 50k bribe, none of them are allowed to contradict that even though it was on video, because anyone who contradicts him gets blasted. When Trump says Portland is currently on fire like the worst of 2020, no one is allowed to point out he's exaggerating it and the protests are only one block and have mostly consisted of people in fuckin mascot costumes fucking with feds, because anyone who contradicts him gets blasted. We're stuck in an Emperor's New Clothes situation, except instead of the emperor being naked, the emperor is instead insisting the kingdom isn't currently sinking into the ocean.

>>1447328
Democrats shut the government down. What the fuck.

>>1447272 (OP)
the rapid increase of non cash assets like stocks, crypto and gold is showing inflation is higher then ever.
companies don't suddently go up 20% in under a year.

>>1447502
I guess you missed the crash a few days ago.

>>1447497
You have TDS. That's morning anyone can do about inflation. The government printed too much money the last six years. The tariffs are definitely making it worse because Trump doesn't realize there no alternative for cheap ass temu shit being made by slave factory workers in the US. Dumb fuck economists Luke to pretend the debt isn't real, but it has to be serviced at some point or the only alternative is a civil or global war to reset it

>>1447515
The fuck kind of broken Speech To Text program is this?

>>1447515
What does tranny derangement syndrome have to do with it?

>>1447509
look at the nasdaq futures the crash was a 1 time thing and its already bounced back most of the losses on monday, It was also because of trump randomly making nonsense about 100% tariff on china over rare earths it wasn't a market correction.
most of the crypto stocks are at all time highs, and gold futures just broke through 4150 and almost breached 4200, that's a sign of inflation getting worst not better

>>1447499
Anyone who says it was the other party if fucking retarded. Neither party is truly trying to help you.

>>1447556
Go to bed Ivan it's late

if you make adjustments for the inflated imports we got early this year (due to dipshit screaming tariffs and scaring businesses into stockpiling) going down over the last 2 quarters, the GDP has been at -1.6% and I'm sure we all know what that means. Homeboy caused a ressession and the shit got masked by businesses prepping before he was able to start doing damage.

>>1447604
Smoke screens and mirrors to rob what is left.