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Oct 13, 2025, 11:10:29 AM IST
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US Inflation on the Rise
US inflation has increased in three of the last four months, slightly higher than a year ago. Despite this, President Trump and some Federal Reserve officials have downplayed its significance, giving the impression that inflation is under control. (Source: AP)
TIL Creatives
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Trump and Powell Statements
President Trump told the UN that grocery prices and mortgage rates are down, claiming that inflation has been defeated. Around the same time, Fed Chair Jerome Powell said that inflation has come down significantly from its post-pandemic highs and that the upside risks to inflation have diminished.
Agencies
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Risks of Underestimating Inflation
Ignoring inflation above the Fed’s 2% target carries risks. Many Americans still feel the burden of rising prices, which could impact the White House politically. For the Federal Reserve, if inflation persists longer than expected, its credibility could suffer, making it harder to keep prices stable in the future.
Agencies
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Current Inflation Trends
Consumer prices rose 2.9% in August compared to a year earlier, slightly above the Fed’s target. Grocery prices increased 2.7%, marking the largest gain outside the pandemic since 2015. Coffee prices surged nearly 21% due to tariffs on imports from Brazil and climate-related droughts affecting harvests. Long-lasting manufactured goods also rose about 2%, ending decades of mostly falling costs.
IANS
Tariffs on imports like furniture, appliances, and toys have pushed up costs for many companies. Campbell Soups and the National Tree Company are raising prices to offset these higher costs. Ongoing tariffs could lead to longer-lasting inflation rather than just a temporary increase.
iStock
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Federal Reserve’s Dilemma
The Fed cut key interest rates despite inflation remaining above target, prioritising the risk of worsening unemployment. Officials are aware that losing public confidence in their inflation-fighting ability could make it harder to control prices. However, some trends, such as slower rental cost growth and reduced immigration, may help ease inflation pressures in the coming months.
AP
Economists warn that inflation may not be temporary. Continued tariffs and price hikes could sustain higher inflation levels. If Americans lose confidence in the Fed’s ability to manage inflation, controlling prices could become much more difficult and costly. (Disclaimer: This slideshow has been sourced from AP)
NYT News Service
English (US) ·