The start of 2025 brought an unexpected rise in US inflation, which could pose a challenge to president Donald Trump‘s economic plans. In January, core goods prices – excluding food and energy – rose by 3.3% on a yearly basis, exceeding the 3.2% estimate. On a monthly basis, inflation came in at 0.4%, above the 0.3% forecast.
Trump Insists on Lower Interest Rates
Although the Federal Reserve kept rates high to contain inflation, Trump pushed to lower them. From his Truth Social platform, he called for a cut in interest rates, claiming that such a move would boost the economy along with his new tariffs.
However, experts warn that lowering rates could stimulate consumption and generate a further spike in prices. Kevin Hassett, former director of the National Economic Council, suggested that one strategy to contain inflation would be to slow demand and expand labour supply, which could affect economic growth and even increase unemployment.
Tariffs Add to Economic Uncertainty
Trump‘s trade policies are also raising doubts in the markets. In recent days, he announced a 25% tariff on all steel and aluminium imports, as well as a new 10% levy on Chinese goods. These measures could raise costs for businesses and make it harder to control inflation.
Analysts at Bank of America warned that the combination of Trump‘s trade, tax and immigration strategies could lead to greater inflationary pressures, affecting economic performance in the coming months.
Keep up with the most important news of Economic World of Miami in all the platforms of Mundo Ejecutivo and in its social networks.
