Trump effect on inflation is back in the spotlight as Americans confront higher prices for everyday essentials. With the annual U.S. inflation rate rising to 3% in September 2025, voters are asking a familiar question: how much of this is politics, and how much is the broader economy?
Key Points
President Trump returned to the White House promising to “end inflation.” His second term began with a flurry of economic moves, from tariffs and deregulation to cuts in government programs and foreign aid. Supporters say a president can make or break the cost of living. Skeptics argue that inflation is driven mainly by forces no one politician can fully control.
Economists and financial experts say the truth lies somewhere in between. The president can shape inflation pressures and how they’re felt, but cannot turn price growth on and off like a switch.
Understanding the Trump Effect on Inflation
Financial planner Steve Azoury, CEO of Azoury Financial, says the presidency does matter when it comes to prices.
“In our country, the sitting president can have a huge influence on inflation and the effects of it,” he said, noting that “inflation can turn $1 into 50 cents, and for a society to run, it must be under control.”
During his latest campaign, Trump made inflation a central theme, pledging to bring it down aggressively if he won a second term. Once back in office, his first 100 days were marked by a series of economic steps aimed at reshaping the policy landscape:
- Increasing tariffs
- Pursuing deregulation
- Cutting government programs
- Reducing foreign aid
Economist Wayne Winegarden of the Pacific Research Institute frames the Trump effect on inflation through the lens of federal finances.
“Presidents influence inflation through their spending decisions,” he explained. “Running large deficits will create pressure on the Federal Reserve that ultimately causes inflation to rise.”
Conversely, he said, “implementing a fiscally responsible budget with a more efficient tax system will reduce the deficits and free up the Federal Reserve to implement sounder monetary policy.”
These comments highlight a key point: the Trump effect on inflation largely runs through government budgets and how easily the central bank can respond, not through any single law or speech.
What Really Drives Prices Beyond Politics
While presidential policies tend to dominate headlines, economists stress that inflation is driven by a wider web of economic forces. The Trump effect on inflation, they say, is only one piece of a much larger puzzle.
Winegarden points to the interaction between three pillars:
- Government spending
- Economic growth
- Monetary policy
“The connection between government spending, economic growth and monetary policy drives inflation,” he said. “But because of its complexity, it is not well understood.”
One of the biggest and most visible drivers is energy. From heating and electricity to transportation and shipping, energy costs ripple through almost every product and service. The current U.S. inflation forecast for 2026 suggests overall price growth could remain elevated and even edge higher, to around 3.2%.
“The cost of energy needs to get under control,” said Joe Camberato, CEO at National Business Capital, which helps business owners secure financing.
“Think about every single thing you use in your daily life — it uses energy,” he added. “Your house, all forms of transportation and every item you buy was shipped to you. We need energy prices to come down, and innovation in energy to happen faster.”
Regulation is another channel through which the Trump effect on inflation can appear. Trump has emphasized deregulation in his latest term, signing an executive order that requires eliminating 10 existing rules for every new one added.
“Restrictions on companies can have a big impact on what companies can or cannot do,” Azoury said. “Productivity of workers and supply chain issues can impact inflation, as well. High productivity can help increase output and wages. Supply chain issues can help promote supply and demand.”
In that sense, the Trump effect on inflation runs not just through fiscal choices, but also through rules that influence how efficiently businesses can operate and how quickly goods move from producer to consumer.
Lessons From Past Leaders on Inflation
History offers perspective on how much presidents can shape — but not fully command — the inflation backdrop.
The 1970s stand out as a period of severe inflation. Winegarden and others point to a combination of weak Federal Reserve policy and heavy government spending by Presidents Lyndon Johnson, Richard Nixon, Gerald Ford and Jimmy Carter as key contributors. Price pressures built and persisted, illustrating how prolonged policy decisions can shift the inflation trend for years at a time.
By contrast, inflation during the 1980s was kept relatively under control, despite occasional economic crises. A more disciplined monetary stance from the central bank helped stabilize expectations, even as politics and the broader economy presented new challenges.
Looking more recently, Camberato argues that the Trump effect on inflation in his first term was largely positive from a price-stability standpoint.
“Trump did a solid job during his last term by using tariffs strategically and getting companies to bring manufacturing back to the U.S.,” he said. “That move helped stabilize prices and keep inflation low. It showed how smart trade policies and a focus on domestic production can make a big difference.”
In his view, trade actions and reshoring efforts in Trump’s earlier time in office supported more stable prices. However, he notes that the current term has not yet produced the same outcome. “This time around he is not seeing the same level of success — at least not yet,” the article explains, with inflation at 3% and forecasts pointing to only modest easing ahead.
These examples underline a recurring theme: the Trump effect on inflation, like that of any president, is blended with central bank choices, global shocks and long-term economic trends.
Trump’s Latest Moves and Their Inflation Impact
In his second term, Trump has focused on several levers that can influence inflation, even if they do not guarantee a specific outcome.
Camberato notes that the president can shape price pressures through:
- Energy policies
- Changes in regulations
- Adjustments to taxes
- Incentives for domestic manufacturing, including food and energy
“All of that affects prices,” he said.
He also stresses that the Trump effect on inflation extends beyond formal policy.
“Plus, a president can either boost [consumer] confidence or destroy it, which plays a big role in how markets react. And when markets move, inflation follows.”
The year 2025 has already seen “a lot of ups and downs” on these fronts, and the outlook for 2026 appears similarly unsettled. Shifts in energy markets, evolving regulatory efforts and ongoing debates over spending and taxes all feed into the inflation picture, alongside changes in how confident households and businesses feel about the future.
Taken together, these threads suggest that the Trump effect on inflation today is most visible in how policy nudges underlying drivers — like energy and regulation — and how it shapes expectations, rather than in any direct control over the inflation rate itself.
What the Trump Effect on Inflation Means for Consumers
For everyday Americans, the Trump effect on inflation ultimately shows up in familiar places: the gas station, the grocery aisle, utility bills and rent or mortgage payments. But experts caution against placing all the credit or blame for those price changes on whoever sits in the Oval Office.
The latest experience underscores that a president can:
- Influence inflation through spending, taxation, energy policy and regulation
- Affect business decisions on production and supply chains
- Move consumer and market confidence, which in turn shapes behavior
At the same time, no president can fully override global energy prices, long-standing budget pressures or the Federal Reserve’s independent decisions. Inflation remains a complex outcome of politics, policy and long-term economic trends that work together over time.
Understanding how the Trump effect on inflation fits into that larger picture can help households respond more thoughtfully — whether by budgeting for higher costs, planning for potential rate changes or simply recognizing that no single election will determine the entire path of prices.
The outlet that published the original analysis stresses that it is nonpartisan and aims to cover politically sensitive economic topics objectively. The broader lesson is similar for consumers: focusing on the underlying drivers of inflation, rather than only on partisan narratives, can lead to more informed financial decisions as 2025 wraps up and 2026 comes into view.
