If something seems too good to be true, a realist would suggest that’s because it could be. When President Trump promised on the campaign trail to “end inflation,” it could have been one of those moments.
Economists may have been surprised by electoral engagement because it was low, stable inflation is a symptom of a healthy economy. When consumers can expect relative price increases, they can plan their spending and savings accordingly, while businesses can also reasonably plan for increased costs.
What Trump may have been trying to convey is that he would reduce the runaway price hikes once inflation remains well above the Fed’s 2% target through 2024. The latest data from the Bureau of Labor Statistics shows the annual inflation rate currently stands at 2.7%.
Recent analysisshared exclusively with Fortuneof Sen. Elizabeth Warren’s staff on the Senate Banking, Housing and Urban Affairs Committee, reports that this year-over-year increase equates to an additional cost of $2,120 per household, assuming they purchased the same goods and services in 2025 as they did in 2024. This includes an increase of $123 on electricity bills and $150 on groceries.
Politicians on the other side of the bench might argue that prices should rise anyway because the Fed targets inflation at 2% and it is difficult to quantify how much White House policy has contributed to rising prices. However, in the context of the second Trump administration, the question of whether tariffs and trade wars the increase in costs remains relevant.
After all, 2025 was the year of the Liberation tariffs. On April 2, President Trump announced a series of tariff increases for every country on the planet, including those with existing trade agreements. Since then, many partners have reached an agreement with the White House and, although below the threshold initially threatened, the agreements have nonetheless led to increased levies on both sides.
Debate also rages over whether this increased cost would have an impact. Trump’s cabinet has suggested that the massive price spike many feared did not occur, while others point out that inflation rose steadily from April to September and remains high. Trump’s team has also described any rise in prices as an incident: Treasury Secretary Scott Bessent, for example, said that any potential impact of inflation “unique fit”.
Can consumers afford to “look through”?
Even for a one-time adjustment, consumers still have to pay for that adjustment, argued Emma Hussey, Sen. Warren’s policy adviser on the Banking Committee. She said Fortune: “Fed policymakers can debate whether to ‘ignore’ inflation, but families have no choice but to face higher costs. Trump’s chaotic tariffs and failed economic policies have driven up prices – even if these price increases are ‘one-time’ in the data, they are permanent for already depleted families.”
Senator Warren pointed out that President Trump promised families lower costs from “day one”, but said her economic agenda was about “squeezing families who are already struggling to get by. This analysis shows that Trump’s broken promises have real consequences and they are showing up in Americans’ bills every month,” she added.
The perception of affordability has proven a difficult topic to debate with voters, even as the pandemic has proven to be an extraordinary economic event. As David A. Steinberg, associate professor at John Hopkins University, wrote in a Study 2024: “Simply asking people to think about inflation reduced approval of the Biden-Harris administration and reduced confidence in the ability of Democratic Party leaders to manage the economy. In other words, when people thought about inflation, their support for the Democratic Party fell.”
For the Trump administration, arguments that tariffs lead to higher prices may be outweighed by the scale of revenue they generate: $289 billion in 2025 alone. The White House has, in turn, promised to share this amount with the public in the form of $2,000 rebate checks (although the economic practicality of this plan is remains to be seen).
And despite some volatility, Trump 2.0 still presided over a period of solid economic growth, with GDP up 4.4%. in the third quarter of 2025.
This is a fact that the White House was keen to emphasize, as spokesperson Kush Desai said. Fortune: “The simple reality is that Americans have objectively improved since President Trump took office with inflation slowing, real wages rising, and economic growth accelerating – the exact opposite of what happened under Joe Biden. »
