Dem
47
GOP
53
As you probably recall, Donald Trump won in 2024 because eggs cost more than they used to and he was going to fix it. Back on planet reality, the president has little power to lower prices, but does have some limited power to raise prices—for example, by levying tariffs on imports.
Guess what? Inflation is back. Prices in January 2025 were 3% higher than prices in January 2024. That's slightly more than the 2.9% in Dec. 2024 (vs. Dec. 2023). January is the fourth consecutive month inflation is up. Core inflation, which excludes the volatile food and energy costs, was up 3.3% in January. Some specific items that consumers will notice went up even more. Eggs are up 53% over a year ago. Meat is up 3.2% and ground beef is up 5.5%. Rents and mortgage rates are also climbing, with the interest on 30-year fixed rate mortgages now at 7%. And this is before the inflation generated by the tariffs kicks in.
Douglas Holtz-Eakin, president of the conservative think tank American Action Forum said: "This is an unambiguously bad piece of news for everyone involved—the administration, Trump and the Fed." In particular, with inflation rearing its ugly head again, the Fed will have to stop cutting interest rates. This will make Trump unhappy, because the real estate business lives on borrowed money and thrives on low interest rates. But if the Fed allows inflation to take hold, the political fallout for Trump will be horrendous. In 2026, Democrats will say: "The Republicans promised to lower prices. Prices are higher than ever now. They lied to you. Time to punish them for lying to you." That is the kind of message voters could respond to. (V)