Trump Says There Is ‘Just about No Inflation.’ This is What You Must Know

• In a social media submit on Monday, President Donald Trump criticized the Federal Reserve for not slicing rates of interest, saying there’s “nearly no inflation.”

• The newest report on shopper inflation confirmed that inflation has slowed, however remains to be above the Federal Reserve’s aim of two% yearly.

• Central bankers are content material to carry their rate of interest at an elevated degree whereas they wait and see what results tariffs have on the financial system.

In his newest criticism of the Federal Reserve, President Donald Trump stated there’s “nearly no inflation,” however central bankers might beg to vary.

In a submit on the social media platform Reality Social Monday morning, the president argued that the Federal Reserve ought to minimize rates of interest as a result of shopper prices are trending “so properly downward.” Whereas worth will increase have slowed in current months, inflation remains to be above the place the Federal Reserve would love it to be to make cuts to its influential federal funds charge.

This is what it’s good to learn about inflation and rates of interest proper now.

In the newest report on shopper costs, general inflation was up 2.4% over the identical time final 12 months, nonetheless above the Federal Reserve’s annual aim of two%.

Trump additionally stated meals costs have “considerably lowered” and power prices had been “means down.”

Power costs fell by 3.3% in March from final 12 months. Nevertheless, not all power was cheaper. The price of gasoline fell considerably and outweighed electrical energy and pure fuel will increase. Meals costs grew 3.0% from the identical time final 12 months.

Meals and power costs can fluctuate from month to month for causes which have little to do with broader inflation developments. For that cause, economists and Fed officers typically pay particular consideration to “core” inflation measures, which exclude costs for meals and power. That quantity rose 2.8% over the past 12 months, the smallest enhance since March 2021.

The Federal Reserve makes use of its influential federal funds charge to assist curb inflation, which is outlined as a broad rise in costs for items and providers over time.

When the fed funds charge is increased, borrowing, together with on bank cards and thru loans, is costlier. That always decreases shoppers’ and companies’ spending, which, in flip, ought to assist average the speed of worth will increase.

The Fed has set its annual inflation aim at 2% due to the twin mandate Congress gave the central financial institution: preserve inflation low and employment excessive. To steadiness these two issues, the Fed has to discover a place the place its key rate of interest is excessive sufficient to maintain inflation from flaring, however low sufficient that it does not constrict hiring.