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Though President Donald Trump hosts press gaggles and greetings through all hours of the day and night, the president usually reserves his solo prime-time speeches from the White House for developments in national security or world warring. The last time Trump beckoned the press with as much pomp and circumstance as he did Wednesday night was over the summer, when he announced that Operation Midnight Hammer dropped 14 unprecedented bunker busters on the heart of Iran’s nuclear weapons capability.
Trump’s December address wasn’t about achieving peace in the Middle East, but it was about tackling the only issue arguably harder to solve and more important to the public: the cost of living.
LOW HOUSING SUPPLY REMAINS TRUMP’S BIGGEST OBSTACLE TO WINNING VOTERS’ ECONOMIC APPROVAL
Couched within a litany of his second-term accomplishments, Trump conceded that although former President Joe Biden created the worst inflationary crisis the country had suffered in 40 years, Trump has inherited the responsibility. And the fact is that voters remain upset with the hangover of Bidenomics. The same 9 in 10 people polled by Fox News who said they were concerned about inflation and high prices on Inauguration Day reported the same in the network’s December poll, and a 2-in-5 plurality of both Democrats and Republicans say Trump should be paying more attention to high prices.
Well, December’s disquisition from the Diplomatic Reception Room was Trump’s clear effort to do so, and the media rewarded his attempt with the grace we would expect.
“This is what a presidential panic looks like,” the Atlantic’s Tom Nichols boasted of Trump’s “fear-drenched rant.”
CNN’s Stephen Collinson declared that Trump’s “dark Christmas story” copied the delusional, nothing-to-see-here gaslighting that Biden performed for four years while simultaneously disseminating “his most dystopian rhetoric.” So was Trump saying the economy is 100% fine, à la Biden? Or was he admitting it is still suboptimal?
ABC News White House correspondent Selina Wang sneered that Trump was “rushed and defensive” while bragging that “inflation has actually been ticking up.”
Maybe Trump was panicking, and, frankly, the public has sorely needed a president with both the decency to panic over the issue we prioritize the most and the ability to address those concerns after sundown, unlike his senile predecessor.
But Trump didn’t have to hold his breath for too long. Literally overnight, the news began to turn.
In the first and extremely belated consumer price index report released since the Democratic Party’s record-setting shutdown of the federal government, the Bureau of Labor Statistics found that headline CPI inflation rose 2.7% in the year ending in November, while the Federal Reserve’s preferred measure of core CPI inflation, which excludes the volatile categories of food and energy, rose just 2.6%. Both measures came in dramatically below expectations, and core inflation, which averaged 3.3% when Trump took office, has sunk to its lowest level since the start of Biden’s presidency.
The BLS also found that real average weekly wages, which fell 4% across Biden’s tenure, are up 1.5% since Trump took office. Meanwhile, the 4.6% unemployment rate remains more than a full point below the historical average.
The data, which had to try to fill in the hole of the entirety of October and catch up in November, are not perfect. Naysayers will balk at the BLS’s finding that housing inflation collapsed, but that’s well in line with independent and external data showing that rental prices are, in fact, falling.
And of course, the largest caveat is that 2.6% annual core inflation is indeed still above the Fed’s maximum 2% target. The mission is not yet accomplished, and Trump would be mistaken if he assumed so.
But 2.6% core inflation in November is a 27% reduction from the 3.3% core inflation Trump inherited in January. And the fruition of Trump’s One Big Beautiful Bill Act may actually keep the progress going.
For fiscal 2025, the federal budget deficit fell by a small but statistically significant 4%, and with the annualized deficit-to-GDP ratio in the third quarter of the year finally falling below the recent and persistent plus-6% level. For the first two months of fiscal 2026, the federal budget deficit has plunged another 19% from the year before.
In small part, this is a product of the quarter-trillion-dollar tariff bill that Trump unilaterally imposed on domestic importers. But more crucially, both working incomes and capital gains are sky high. While booming economic growth is outpacing inflation, those higher earnings translate to higher tax payments that shrink the deficit that drives the bulk of our inflation.
The real question is whether voters want a return to the Fed’s 2% target or to travel back in time to where prices were before Biden took office. Unfortunately for Trump, it’s possible the public thinks the answer is the latter.
According to an Echelon Insights poll, 3 in 4 voters say that “only a decline in prices would be enough to convince” them that inflation and costs are no longer a problem. That figure includes more than two-thirds of Trump 2024 supporters. By this logic, voters wouldn’t be happy until both Trump and the Fed crashed the economy to trigger mass deflation — until voters decided that actually double-digit unemployment was their No. 1 concern.
The only way out for the White House is through.
WILL TRUMP FINALLY MAKE REPUBLICANS LET OBAMACARE DEFUND ITSELF?
Voters spent three solid years of Trump’s first term rewarding him for the economy, and if Trump stays a similar course, they will likely do so again. Prices do not have to fall, but the rate of increase does have to continue to trend toward or below 2%. This means keeping federal spending to an absolute minimum and a deregulatory agenda, especially when it comes to the scourge that is a shortage of housing supply, endlessly unfurling. Real wage growth has to beat inflation consistently, and by a good margin. Over time, consumers may forget the nominal price they used to pay for a pint or a pizza, but they will be constantly reminded how much they can buy with each paycheck and how much their budgets leave them with savings to spare.
2025 will not prove the end of Trump’s presidency, but the beginning of his victory over the biggest battle voters care about. He’s not fighting one suboptimal year of polling on affordability, but to bring half a decade of elevated inflation to a close once and for all.