Trump says U.S. prices are "coming down tremendously." Here's what the data shows.

President Trump claimed prices are “coming down tremendously,” but official data show inflation has edged higher through much of his first year back in office—CPI rose 3% in September after a low of 2.3% in April—and Federal Reserve Chair Jerome Powell and others point to the administration’s new tariffs as a key driver of recent goods-price increases. The Fed expects the tariff-driven bump to be largely one‑time and to fade next year (projecting inflation around 2.4% in 2026), though some analysts estimate headline CPI was nearer 3.3% in November. For consumers the pain persists: grocery prices were up 2.7% year‑over‑year in September (about 49% higher since 2020) with items like beef surging ~17%, housing remains largely unaffordable (typical income needed ≈ $131,400), gas is down but electricity costs and utility delinquencies have risen—factors that could constrain spending and shape market and policy responses in the near term.

Analysis

President Trump's claim that "prices are coming down tremendously" contrasts with official CPI data showing inflation rose to 3.0% in September after a low of 2.3% in April and has generally ticked higher through his first year back in office. Federal Reserve Chair Jerome Powell and the article attribute part of the recent uptick in goods inflation to new administration tariffs, and an independent estimate (Mark Vickery, Zacks) places November CPI nearer 3.3%.

Household-level pain is concentrated in essentials: grocery CPI was up 2.7% year‑over‑year in September and grocery bills are roughly 49% higher since 2020, with beef up ~17%, while gasoline is down 0.5% YoY and below $3 a gallon in many states. Energy is bifurcated—lower pump prices from strong refinery output but residential electricity costs rose more than 10% through the first eight months of 2025, and utility delinquencies and overdue balances have increased materially.

Policy and market implications are mixed: the Fed expects the tariff-driven bump to be largely one‑time and forecasts inflation to recede to 2.4% next year (from ~2.9% in 2025), but persistent consumer cost pressure and acute housing unaffordability (typical income needed ~$131,400 vs ~$65,000 five years ago) imply ongoing downside risk to discretionary demand and volatility around CPI prints and tariff policy.

Key Decisions for Investors

• Favor defensive consumer staples and food retailers with clear pricing power and margin resilience while trimming exposure to discretionary retail reliant on stable real wages, given grocery CPI +2.7% YoY and grocery bills ~49% higher since 2020
• Underweight housing and long-duration mortgage-sensitive names because acute affordability (typical income needed ~$131,400) should constrain demand even as mortgage rates have eased
• Increase macro hedges against renewed goods inflation and policy risk by biasing to short-duration fixed income and TIPS and monitor tariff announcements closely since tariff pass-through has been identified by the Fed as a material but potentially transitory driver
• Tactically consider exposure to refining and retail fuel beneficiaries that benefit from strong refinery output and lower pump prices, while watching electricity- and utility-exposed names for margin pressure from rising residential power costs