Trump Touts His ‘Economic Boom,’ Lashes Out at Fed and Others

Trump in Detroit
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening. On this date five years ago, a week after the January 6, 2021, attack on the Capitol, President Trump became the only president ever to be impeached twice by the House, this time on a charge of "incitement of insurrection." He was acquitted by the Senate both times. Here's what Trump was up to today.

Trump Touts His 'Economic Boom,' Lashes Out at Fed and Others

In what was billed as an economic address to the Detroit Economic Club this afternoon, President Trump cycled through many familiar - and often dubious - claims as he touted the successes of his first year back in office, leveled criticisms at Democrats and some Republicans, repeated lies about rigged U.S. elections, praised the operation that captured Venezuelan leader Nicolás Maduro, blasted the massive child care fraud in Minnesota and the Somali population living there, and attacked or mused on a broad range of people and issues. He also touched on the economy.

"The results are in, and the Trump economic boom has officially begun," the president said, even as Americans' views of the economy have worsened and approval ratings of his handling of it have fallen sharply.

With midterm elections looming in November and economic concerns still weighing on many voters, Trump claimed that his administration has quickly reversed the weakness under President Joe Biden to achieve an economy featuring "super high growth" and "almost no inflation."

"We have the highest growth we've ever had," Trump claimed, without any basis. "Think of that. The highest growth we've ever had, and we've only been there 11 months. Think of what we can do for the rest of it."

Trump again criticized the term "affordability" as a "fake word by Democrats," but he promised he'd soon be announcing new policy proposals to lower costs, reduce healthcare premiums and promote home ownership for Americans.

As his administration tries to hone its economic messaging and respond to the affordability concerns that Democrats have used to regain some political momentum, the president has proposed a series of populist policies in recent weeks. They include a call for Congress to ban institutional investors from buying up single-family homes, an endorsement of legislation to crack down on credit card swipe fees and a demand that credit card interest rates be capped at 10% for one year.

He has also continued to hammer Federal Reserve Chair Jerome Powell over interest rates, which he insists should be far lower than they are now. "That jerk will be gone soon," Trump told his audience in Detroit.

In his speech, Trump also lashed out at Republicans who supported a resolution to limit his war powers by requiring congressional approval for further attacks on Venezuela. He slammed Sens. Susan Collins, Lisa Murkowski, Rand Paul and Todd Young by name.

The bottom line: Trump has again been focused on foreign policy, from ousting Venezuela's Maduro to threatening Greenland, Cuba and Colombia to encouraging protestors in Iran. He'll be pitching more economic policies - and prodding Republicans to hone their economic messaging - but it's not clear yet whether any of his specific proposals will be enacted via legislation. Some Republicans in Congress are working on another party-line reconciliation bill, but the party has yet to coalesce around a set of priorities for a possible follow-up to their "One Big Beautiful" package of tax and spending cuts.

Inflation Remains Stubbornly Above Fed's Target

The consumer price index rose 0.3% from November to December and 2.7% over the last year, the Bureau of Labor Statistics announced Tuesday.

Excluding volatile food and fuel prices, the core measure of inflation rose 0.2% on a monthly basis and 2.6% on an annual basis.

The topline results for both core and topline inflation over the previous 12 months matched the November numbers, easing worries that inflationary pressure was rising in the wake of the government shutdown in October and part of November.

The latest data indicate that inflation remains modestly but stubbornly above the Federal Reserve's 2% target rate, with many analysts highlighting the tariffs imposed by President Trump over the last year as an important factor in the persistence of inflationary pressure throughout the economy.

Housing costs were the largest factor in the December results, with shelter prices rising 0.4% during the month, the largest increase since August, and 3.2% over the year. Overall food prices rose 3.1% in 2025, while grocery prices specifically rose 2.4% - a larger annual increase than in 2023 or 2024. Coffee prices continued to climb, rising 1.9% from month to month and 20% over the year.

White House reacts: President Trump celebrated the report, claiming it shows "Great (LOW!) Inflation numbers for the USA." He also used the occasion to renew his call for Fed Chair Jerome Powell to cut interest rates - an obsession for Trump as his administration launches a highly unusual criminal investigation of the central bank chief.

"Powell should cut interest rates, MEANINGFULLY!!!" Trump wrote on his social media platform. "If he doesn't he will just continue to be, 'TOO LATE!'"

Speaking to reporters outside the White House, Trump again cited problems with renovations of the Fed headquarters buildings in Washington as he cast aspersions on Powell's performance. "He's billions of dollars over budget. So, he either is incompetent or he's crooked," Trump said, referring to the building project that is the focus of the Justice Department's criminal investigation.

What analysts are saying: Many economists welcomed the December numbers, seeing them as a sign that the worst of the tariff-driven inflation may be over.

"In a year where there was an incredible amount of angst related to tariffs and the potential for upward pressure on that, we're finishing the year in a more benign stance than where we started," said Tom Porcelli, chief economist at Wells Fargo, per The Wall Street Journal.

Michael Pearce, chief U.S. economist at Oxford Economics, made a similar point. "Distortions caused by the government shutdown have made the inflation data harder to interpret, but the recent run of figures suggests inflation has peaked," Pearce wrote in a note to clients. "We think tariff-driven price rises have mostly been passed through and anticipate further disinflation in services in 2026 will drive inflation back closer to the 2% target by the end of the year."

Still, not everyone is convinced that the threat of inflation reheating is over. RSM Chief Economist Joseph Brusuelas said the economic numbers are still distorted by the government shutdown, and "top-line and core data will most likely move higher as the noise fades" over the next few months.

Brusuelas also expects economic growth to pick up as fiscal stimulus from the Republican tax cuts kicks in, which could push inflation higher even in the absence of tariff-related pricing pressure.

The bottom line: Inflation is holding steady, but the outlook is uncertain as analysts weigh the potential effects of tariffs and growth. That suggests that central bank officials will have little reason to cut interest rates again over the next few months, and investors expect rates to hold steady at least until the Fed meeting in June.

 

Number of the Day: 800,000

About 800,000 fewer Americans have signed up for Affordable Care Act health insurance plans this year compared to last year, a drop of 3.5%, according to new government data cited by the Associated Press.

The Centers for Medicare and Medicaid Services said Monday that 22.8 million people have signed up for ACA coverage for 2026 since open enrollment started on November 1. That's based on data through January 3 for the federal exchanges and through December 27 for most state exchanges.

Enhanced subsidies that helped millions cover the cost of their ACA plans expired at the end of 2025. The new data reinforces concerns that the expiration could result in lower enrollment as millions of Americans confront higher out-of-pocket costs and many decide to drop their coverage.

Senators are still negotiating a compromise that could extend the expired tax credits, with new limits, after the House passed a Democratic-led bill that would extend the higher subsidies for three years.

Open enrollment ends on January 15 for most states using the federal marketplace, though a bipartisan deal in Congress could still extend the window for signups.

US Deficit for December a Record $145 Billion

The U.S. government posted a $145 billion budget gap for December 2025, up $58 billion, or about 67%, compared with the same month the prior year, according to data released by the Treasury Department on Tuesday. The shortfall is a record for the month of December, though shifted timing of payments due to calendar effects added to the deficit.

Outlays of $629 billion reflected payments that were accelerated into December because January 1 was a holiday. Revenues totaled $484 billion, including $28 billion in customs duties, down a bit from recent months but still more than $20 billion higher than the prior year.

The deficit for the first three months of fiscal 2026 came to $602 billion, down 15% from $711 billion for the same period a year earlier.

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