President Donald Trump expects inflation to remain low, even though renewed strikes on Iran could result in higher energy costs.
The Tuesday consumer price index showed that inflation dropped to 3.5% in June, but it is unclear if the trend will continue in July, as Trump notified Congress that “limited” military action against Iran has resumed. He has struck Iran for three consecutive nights while Iranian missiles have hit tankers in the Strait of Hormuz.
When asked by the Daily Signal if inflation will remain down next month, Trump said, “I think so.”
“We had the worst inflation in history, and the history of our country,” Trump said. “I mean, we had months where it was 9% and 10%, and now we have a report that just came out. It was just released.”
The inflation rate drop was the largest decrease since April 2020.
“Thank you for bringing it up, but the report was incredible,” Trump said. “That means prices are coming way down, and we’re doing a great job.”
Trump looked at the cameras and said, “Remember that for the midterms.”
“Remember that, because nobody else could do it,” he said. “Prices are way down. Prices are coming way down, and we’re going to bring them much lower yet.”
Economists widely expected inflation to increase in the new report, which would have put pressure on Trump’s new Federal Reserve chair, Kevin Warsh, to raise rates. However, the positive results take off the pressure for now.
At the Fed’s meeting last month, the board made a unanimous decision to leave rates unchanged.
On Tuesday morning, Warsh promised lawmakers he would bring inflation down, saying the Board of Governors “have no tolerance for persistently elevated inflation.”
“If we get policy right—and we will—the inflation surge of the last five years will be a thing of the past,” he said.
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