No, Inflation is not “Crushed” | SchiffGold

Trump has repeatedly claimed that he has beaten inflation. His high spending “Big Beautiful Bill,” along with his desperate calls for expansionary monetary policy draw ire from anyone who understands the world from an Austrian perspective. However, he still has the audacity to claim that he has solved inflation, and we no longer need to worry about it. While official metrics of inflation are over 50% above the target, Trump is able to completely overlook the mismatch between reality and his vision of the world. However, one factor making this reality even scarier is the fact that the reported inflation is most likely far below real inflation, particularly in areas that are vitally important for regular citizens. There are three areas that can help us see this worrying trend, as case studies that can re-orient us towards the most basic applied problems, resulting from inflation. Rent, electricity, and groceries have all gone above the official inflation estimation in the last year, and they all put pressure of the daily constrained optimization problem of American households

While home prizes are coming down from a period of market manipulation, rent is a much more fluid measure of changing shelter costs. Even with structural barriers in place that prevent rapid rent change, it has still beaten the official inflation estimate. From August 2024 to August 2025, rent on average increased 3.5%. This is one of the greatest expenses for most households, so it would have an outsized benefit if rent inflation were cooled. For the median apartment, this price increase is near $800, which could easily eat up someone’s raise or any inflation-related salary increase, particularly for the poorest and society. The nominal increase in median weekly earnings over that same period was a little over 4%, but most of this went to those already well above subsistence. Inflation in rent is one of the most personal and divisive issues, and Trump may pay for this misstep in the polls. Of course, he cannot control all rent prices, but his expansionary instincts were key to this increase in price. Trump cannot tell anyone that inflation does not matter until he effectively slows rent increases. 

From last July to this July, average American electricity prices rose by 5%. Particularly in a time with technological innovation that enables easier access to electricity, this price increase reeks of inflation. Some of the increase might be explainable in increased regulations and a higher industry demand, but electricity is such a homogenous and widely used good that competition has continually been able to bring the price down. While inflation is officially described as around 2.9%, and Trump would describe it far lower, the increase in power prices means that citizens are feeling higher inflation nonetheless. Particularly because power prices have had a historical downward trend, this recent increase might even signal inflation related price increases of over 5%, if the underlying productive factors have only changed for the better. Trump has decreased the price of gas by loosening environmental regulations, but in areas where he can’t deregulate, his great misunderstanding of monetary policy has punished households.

The most damning fact for Mr. Trump‘s low inflation fantasy is the reality of food prices under his reign. While at first it seems that the 3.2% increase in food prices over 12 months ending in August only slightly overshoots the official inflation estimate, the reality that every single month of Biden’s last year had equal or better inflation than the single best month of Trump’s presidency is shocking. The Trump presidency is averaging a monthly rate of almost 2.9% annualized, which is much higher than Biden’s average of 2.3% per month in his last year in office. While there isn’t a great amount of difference between these two numbers, Trump is turning an argument slanted in his favor towards a clear lesser of two evils argument. Biden’s complete incompetence was still not enough to let him overcome Trump’s Keynesian, short term instincts. Increasing food prices is one of the easiest ways to make a nation mad. No matter how much malinvestment-driven economic growth Trump gets from his spending boosts, he must very carefully balance this with the effect on the food bill of the average voter. His inability to keep the basic costs of living down could very easily lead voters to radicalize and choose socialist candidates in the future. Insofar as they are both fans of higher spending and inflation, Biden’s impotence was almost a good thing. Of course, Trump lacks Biden’s draconian social policies and increase of regulation, but he must embrace a more free vision of the economy if he is ever going to fulfill the needs of the people.

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