Staff Reports
This week saw the Federal Reserve hit the pause button on rate cuts, and Donald Trump wasted no time in launching a fresh assault on the central bank. It marks Trump’s renewed fight against the inflation demons that Democrats seem ever so eager to deny. Despite the Biden administration’s relentless claims of victory over inflation—claims that quickly dissipate upon encountering reality—higher prices are still hanging around like an unwelcome guest at a dinner party. The Fed’s recent decision to halt rate cuts tells the real story: inflation is still a lurking menace.
To frame the situation, the Federal Reserve embarked on a rate-cutting spree last year, ostensibly in hopes of shore up a weakening job market ahead of the election. They were singing a different tune this week, however, tossing aside any claims of progress in combating inflation and settling instead on a vague acknowledgment that “inflation remains somewhat elevated.” This tweak to the language indicates a significant retreat from their earlier optimism, as the reality sinks in that inflation isn’t going away quietly.
Trump: “Starting on day one of my new administration, we will end inflation.”
Egg prices are up,
gas prices are up,
prescription drug prices are up.What a crock of shit.
— CALL TO ACTIVISM (@CalltoActivism) January 25, 2025
The Fed aims for a long-term inflation rate of around 2%, yet current conditions show inflation running hot and far outside that target. The dangers are clear: if the Fed continues to cut interest rates, they risk reigniting inflation into an uncontrollable blaze, scuttling all the meager progress they think they’ve made. Meanwhile, the specter of Trump’s upcoming policies looms, particularly concerning tariffs and how they might be employed to influence economic conditions.
Trump didn’t hold back in his online statement, indicating his plan to blast U.S. energy production wide open, curtail suffocating regulations, and revitalize American manufacturing. He pointed fingers at the Federal Reserve for their appalling handling of inflation and suggested that if they had focused less on trendy topics such as woke ideology, climate change, and all things DEI (Diversity, Equity, and Inclusion), Americans wouldn’t be facing the worst inflationary crisis the nation has seen. In short, the Fed has been busy with the wrong priorities, allowing the inflation monster to grow unchecked.
Fed-watchers and financial analysts immediately recognized Trump’s statements as an explicit challenge to the Fed, with some noting he seems to have picked right back up where he left off during his presidency: taking aim at Jerome Powell and the central bank. While some might undermine Trump’s critiques as mere rhetoric aimed at scoring political points, it’s clear he’s positioning himself as the hero who will take charge of the economic mess left behind by the current administration. There’s a cynical game afoot in which Trump paints the Fed as a foil to rally support around his economic vision.
True to form, Trump’s historical economic playbook recalls strategies reminiscent of the Reagan administration, focusing on tax cuts and deregulation to alleviate inflationary pressures. The challenge, however, echoes the past as well: it required a tumultuous double-dip recession in the 1980s to finally rid the country of rampant inflation. Trump’s contemporary proposals lean heavily toward supply-side economics as he considers measures to mitigate costs and ease the financial burdens faced by Americans. But the bigger picture looms with uncertainty, as the timeline for meaningful inflation solutions remains murky.
Biden and the Democrats seem all too focused on trivializing the inflation crisis by throwing out sensational phrases like “Putinflation” and “Greedflation,” which can’t obscure the core issue. They supposedly just discovered the skyrocketing cost of eggs, but the implications of soaring prices reach far beyond breakfast tables. It falls to Trump now to untangle the knots that the Biden administration has left behind. The Fed’s decision to hold rates and Trump’s pointed response offer an early glimpse into his strategy, leaving many to wonder how quickly those policies will translate into relief for the average American suffering from the current inflationary burden.
