President Donald Trump suggested that inflation is on the decline and might continue to decrease, but also expressed concerns about the possibility of deflation.
Inflation ‘Normalized,' Says Trump
On Monday, Trump, while speaking to reporters in the White House, stated that inflation is “essentially gone” and is expected to decrease further. “We have it normalized. And it will go down even a little bit further.”
However, he also mentioned that he does not want deflation. “We don’t want it to be deflation either. You gotta be careful,” said the President.
Trump also criticized the Biden administration, claiming that his team inherited high inflation from them.
Trump’s Measures Against Affordability Concerns
Trump’s comments come amid a series of economic moves by his administration. On Monday, the Trump administration also announced a $12 billion financial rescue package for U.S. farmers affected by low market prices and the impact of the president’s tariff policies.
Additionally, Trump signed an executive order on Saturday, creating food-supply-chain security task forces within the Justice Department and the Federal Trade Commission (FTC) to address risks from price fixing and other anti-competitive practices.
Concerns About Deflation
Despite concerns about inflation, Treasury Secretary Scott Bessent forecasted a 3% GDP growth by the end of the year, attributing the rise in prices to the service economy rather than tariffs. He also dismissed the affordability concerns citing a rise in real income.
On the other hand, Economist Justin Wolfers argued that Trump set unrealistic expectations by promising falling prices, noting that prices rarely decline in a healthy economy. He said many Americans still expect them to drop because of those campaign pledges, even though the usual post-inflation pattern is rising wages, not deflation, something that isn't happening now.
Meanwhile, data shows that personal income rose by $94.5 billion, or 0.4%, in September, above the expected 0.3%, driven by higher wages and increased asset income. At the same time, Core Personal Consumptions Expenditure (PCE), slowed from 2.9% to 2.8%, coming in just below expectations for 2.9%.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
