Trump claimed a "turnaround for the ages" on inflation tonight. The real story spans two presidents, a global pandemic, and a Federal Reserve that did most of the heavy lifting.
Hover over the chart to explore key moments. Annual CPI-U (% change year-over-year).
Scroll through each era to see who did what, and who's taking credit for what.
Inflation was low and stable, hovering around 1.5–2.3%. The economy was humming along. No major inflation concerns. Trump pressured the Fed to keep interest rates low to juice growth — sowing seeds that would matter later.
COVID hit. Trump signed the CARES Act and additional relief — roughly $3.1 trillion in stimulus. The Fed slashed rates to near-zero. Necessary at the time, but flooding the economy with money while supply chains were collapsing created a time bomb. Think of it like hooking up a fire hose to a water balloon — eventually it pops.
Biden signed the American Rescue Plan — $1.9T more in stimulus. Many economists (including Larry Summers, a Democrat) warned this was too much, too late. The economy was already recovering, supply chains were still broken, and demand was surging. Both parties' spending now totaled ~$5 trillion.
Inflation hit 9.1% — the worst since 1981. A perfect storm: bipartisan overspending, broken supply chains, the Ukraine war spiking energy prices, and a Fed that was too slow to act. Every American felt it at the grocery store and the gas pump. This was the cumulative bill coming due.
The Federal Reserve raised rates aggressively from near-zero to 5.25–5.50% — the fastest hiking cycle in decades. This was painful (mortgages soared, markets wobbled), but it worked. Inflation steadily dropped from 9.1% to ~3% by mid-2023. This was NOT a presidential decision — this was an independent central bank doing its job.
By the time Trump took office again in January 2025, inflation was already at ~2.7% and trending down steadily. The hard work had been done. The trajectory was clear and well-established before any Trump Term 2 policy could take effect.
Tonight Trump claimed credit for driving core inflation to the lowest level in 5+ years: 2.5% core CPI. The reality? He inherited 2.7% on a clear downward trend and it dropped 0.2 points. Meanwhile, the Supreme Court just struck down his tariff policies, and beef prices hit all-time records at $6.75/lb. Taking credit for a trajectory he inherited — while his own first-term policies helped cause the spike.
Planted the seeds of the crisis. $3.1T in stimulus and pressure on the Fed to keep rates at zero overheated the economy. Necessary during COVID, but the inflation consequences were foreseeable — and arrived right on schedule.
Poured gasoline on it with $1.9T more stimulus when the economy was already recovering. Was also in the chair when inflation peaked and took the political hit for it, even though the causes were bipartisan.
Did the actual work of bringing inflation down through painful, aggressive rate hikes. This wasn't a presidential decision — it was an independent institution making hard choices that hurt both parties' voters.
Inherited an economy where inflation was already 2.7% and falling. Going from 2.7% to 2.4% is fine, but calling it a "turnaround for the ages" when your first-term policies helped create the problem is selective storytelling at best.
"It's like someone who helped start a fire, left, came back after the fire department mostly put it out, sprayed the last bit with a garden hose, and then claimed they saved the building."