Trump Softens Tone on Inflation After Pledging to Lower Prices

President Trump promised voters that, if elected, he would enact policies that would bring prices down on “Day 1” in office.

But three weeks into his term, Mr. Trump and White House officials have become more measured in how they discuss their efforts to tame inflation. They have begun downplaying the likelihood that consumer costs like groceries will decline anytime soon, reflecting the limited power that presidents have to control prices. Those are largely determined by global economic forces.

The shifting tone could allow Mr. Trump to reset expectations about how fast prices will come down as he pursues policies like tariffs and tax cuts, which economists say could exacerbate inflation.

Mr. Trump and his advisers believe that expanding American energy production and rolling back regulations will reduce costs. They also argue that some of Mr. Trump’s tax proposals, such as eliminating taxes on overtime, would curb inflation by giving workers more incentives to work longer hours, therefore expanding the labor force.

But in an interview this week, Mr. Trump demurred when pressed about when families struggling with high prices would start to feel some relief. He suggested that his policies would make America a rich country, which would reduce the burden on consumers by, in theory, increasing their earnings.

“I think we’re going to become a rich — look, we’re not that rich right now,” Mr. Trump said on Fox News. “We owe $36 trillion. That’s because we let all these nations take advantage of us.”

At a news briefing last week, Karoline Leavitt, the White House press secretary, said Mr. Trump was doing everything possible to alleviate the nation’s cost-of-living crisis. But when asked at what point Americans would begin to experience relief from high consumer prices, she said, “I don’t have a timeline.”

Vice President JD Vance has also tempered expectations that consumer prices will be dropping anytime soon.

“Rome wasn’t built in a day,” Mr. Vance told CBS News last month, explaining that “it’s going to take a little bit of time” for grocery prices to decline.

The pace at which grocery prices are rising is considerably slower than it was a few years ago. At one point in 2022, when the recent inflation surge was at its worst, those costs registered an annual increase of almost 14 percent. As of December, that category was up just 1.8 percent over the previous 12 months, according to data from the Bureau of Labor Statistics.

But those cooling price gains do not mean lower prices. Most things are still more expensive than they were a year ago and some are much higher. Consumers have been experiencing sticker shock when buying eggs, coffee or other grocery staples.

As of December, a dozen eggs averaged $4.15, up from less than $3 six months ago. Egg prices are up nearly 40 percent over the last year. And that’s likely to worsen amid an outbreak of avian flu, which has led to an egg shortage as farmers cull their flocks to prevent the disease from spreading.

Popular restaurant chains such as Waffle House have added egg surcharges to their menus, while grocery stores across the country have begun limiting how many eggs customers can purchase.

Inflation figures set for release on Wednesday are projected to show that consumer prices rose at an annual rate of 2.9 percent in January. Core inflation, which excludes volatile food and energy prices, is projected to continue running above 3 percent.

Ahead of the recent rise in food prices, economists were already on edge about further flare-ups in prices stemming from Mr. Trump’s tariffs. The president has imposed an additional 10 percent tariff on China as well as 25 percent tariffs on foreign steel and aluminum. While he temporarily paused blanket tariffs on Canada and Mexico, those could ultimately go into effect.

On the campaign trail, Mr. Trump also floated a universal tax on all goods coming into the United States, which, if enacted, would mark a sharp escalation from what he pursued during his first term. The president is now poised to impose “reciprocal” tariffs that match the tariffs that other countries have on U.S. exports.

Economists worry about a situation in which a one-off price increase — at a moment when inflation remains higher than the Fed’s 2 percent target — breeds successive increases that over time generate more inflation. Whether that outcome comes to pass will depend chiefly on how Mr. Trump structures his policies, the extent of retaliatory measures from other countries and whether consumers respond by pulling back spending overall.

When Mr. Trump embarked on his first trade war in 2018, the Fed determined it could look through, or ignore, what it expected to be a temporary increase in prices for certain goods and services. At that time, inflation was well below its 2 percent target and growth concerns were paramount, leading officials to eventually lower interest rates in 2019. With such a starkly different inflationary environment today, the Fed may not have that same leeway.

Many economists believed that Mr. Trump’s promises to lower consumer prices were unrealistic and that deflation, when prices broadly fall, would not be a sign of a healthy economy.

Measures tracking how consumers and businesses are thinking about future inflation tell a mixed picture about how worried Americans are at the moment.

One preliminary but often volatile gauge released by the University of Michigan on Friday showed inflation expectations over the next 12 months jumping a full percentage point in February to 4.3 percent. The survey, which ran from the day after Mr. Trump’s inauguration until Feb. 3, also showed a “pervasive” dip in consumer sentiment, with Republicans, Democrats and independents all registering declines.

A separate survey by the Federal Reserve Bank of New York, published on Monday, indicated no discernible change in how consumers were thinking about near-term inflation risks as of January. Yet it did show that over a five-year time horizon, expectations rose slightly to 3 percent. Policymakers focus on those longer-term measures, which tend to more accurately reflect future inflation developments.

A CBS News poll released this week showed that 66 percent of Americans believe that Mr. Trump is not doing enough to lower prices.

Although it is still very early in Mr. Trump’s term, Democrats have been highlighting signs of higher prices as an indication that the Trump administration’s policies are not working.

“What we’re really facing here is an administration that campaigned on bringing down prices and is not doing that,” Senator Chris Van Hollen, Democrat of Maryland, said on Tuesday at a Senate Banking Committee hearing with the Federal Reserve chair, Jerome H. Powell, who said inflation remained somewhat elevated.