
Trump: bad news for his bad economic policy
The results on inflation show that the president will not have an easy time keeping the economy from falling further out of balance.
Inflation in the United States showed an increase in January 2025, reaching 3.0% annually, according to official data. This result exceeds analysts' projections, who expected a rate of 2.8%, and generates pressure on the Federal Reserve's (Fed) monetary policy.
The increase in inflation has generated calls for the Fed to maintain its restrictive stance. The entity has indicated that it is in no hurry to lower interest rates, keeping them between 4.25% and 4.50%, to reach its 2% inflation target. In this context, President Donald Trump has intensified his pressure on the Fed.
"Interest rates need to be lowered, something that would go hand in hand with the upcoming tariffs!!!!! Lets Rock and Roll, America!!!," Trump wrote on his Truth Social account.
Trump has no direct control over the Fed, but his comments have been constant since his return to the White House in January. During his first term he also harped on the need to cut rates to stimulate the economy.
In his post there is a natural contradiction: inflation and tariffs can indeed go hand in hand, but to raise prices for consumers. As it is, Trump does not seem to understand or does not want to understand the dead end he could put the country in.
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Tariffs and their inflationary effect
Trump has reactivated a trade tariff strategy that could have an impact on inflation. This week, he imposed a 25% tariff on imported steel and aluminum, in addition to threatening further levies on products from major U.S. trading partners.
Economists warn that these measures could increase costs for consumers and businesses, putting further pressure on inflation and making a future rate cut by the Fed more difficult.
If inflation continues to rise and the Fed decides to maintain or even raise rates, an economic slowdown could ensue. This situation would jeopardize the Trump administration's growth strategy, as higher interest rates make credit more expensive for households and businesses, reducing consumption and investment.
Added to this is political uncertainty, as Trump has made a series of decisions that have surprised Washington and the world on many fronts such as inclusion policies or the treatment of illegal migrants.
The U.S. economic outlook in 2025 depends largely on the evolution of inflation and the Fed's response. The combination of inflationary pressures and protectionist measures could create a complex scenario for the country's growth.
The debate over interest rates, inflation and tariffs will continue to set the economic agenda in the coming months as the Trump administration seeks to consolidate its economic strategy in the face of global challenges.
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