Trump's vow to reduce prices is quickly encountering a reality check
Norbert Michel, a vice president at the libertarian-leaning Cato Institute, commented on the complexity of reducing prices, stating, “If it was so simple, they would just do it.”
TroibNews 
During the presidential campaign, Donald Trump pledged to reduce “the price of everything.” However, he is soon going to confront the challenges involved in achieving that goal.
The government has limited options for decreasing prices universally—any significant reduction would likely require a substantial reduction in economic activity, which could trigger a recession. Even efforts to implement policies aimed at lowering prices in specific sectors, such as groceries, can prove to be quite difficult.
In an executive order consisting of five paragraphs, signed in his first week back in office, Trump indicated his intention to prioritize deregulation as a method of cost reduction. This approach, while it could enhance corporate profits and potentially spur economic growth, does not assure that businesses will lower their prices.
Trump has also expressed a commitment to controlling the cost of living, while simultaneously urging the Federal Reserve Board to decrease interest rates. However, the Fed appears to be maintaining higher rates to manage inflation, with its next meeting on Wednesday expected to reflect this stance.
“If it was so simple, they would just do it,” remarked Norbert Michel, a vice president at the libertarian-leaning Cato Institute, in reference to the challenge of lowering prices.
The implications of this goal are significant for Trump. Lowering living costs was a key element of his reelection campaign, and many American households still prioritize this issue. Nevertheless, he is already grappling with the practical difficulties of addressing a prominent consumer concern: in recent weeks, egg prices have surged due to an avian flu outbreak that has decimated chicken populations.
Tensions also arise from corporate interests regarding what Trump is promising voters. He has vowed to boost oil production to lower gas prices. However, oil companies typically respond to increased prices by expanding their output, given that they are influenced by global market prices.
Rory Johnston, an oil market analyst at Commodity Context, stated, “there’s a split here between physical capacity and what’s economically likely to happen,” indicating that while there is potential for increased U.S. oil production, the prevailing economic conditions may not favor it.
“The only thing that’s going to get you more production is higher prices,” he asserted.
Simultaneously, the administration is contemplating significant tariffs on imports from all U.S. trading partners, which could lead to increased costs.
Early indications show that consumers might be doubtful about the administration's ability to lower prices. According to a survey conducted by the Associated Press-NORC Center for Public Affairs Research, a majority of Americans are skeptical of the administration's prospects for success in this area.
Vice President JD Vance, speaking on CBS’ "Face the Nation," noted that the administration aims to raise wages relative to prices, a strategy economists believe is more advantageous for the economy over the long run when compared to directly lowering prices.
According to the Bureau of Labor Statistics, inflation-adjusted wages saw a 1 percent increase throughout 2024, though they declined for much of President Joe Biden’s term.
Despite this, Vance reiterated that Trump would ultimately lighten the financial load for Americans, asserting, “Prices are going to come down, but it’s going to take a little bit of time.”
White House deputy press secretary Anna Kelly emphasized that Trump took immediate steps “to unleash American energy, which will drive down costs for families across the country,” and claimed that he has already reversed economic policies of the previous four years that contributed to inflation.
Nevertheless, Trump himself acknowledged in a recent interview with Time Magazine that “it’s hard to bring things down once they’re up.”
While there are approaches through which his administration might slow price increases, achieving this won't be straightforward. For instance, Trump intends to expand the housing supply to tackle the affordability crisis, but this construction could be hampered by state and local regulations beyond federal control.
Progress in managing avian flu could also help mitigate food inflation.
However, the current high borrowing costs, implemented by the Fed to curb inflation, place additional strain on consumers, particularly those looking to purchase homes or vehicles.
Inflation has significantly decreased since its peak in June 2022, but progress has stagnated in recent months, suggesting the Fed may maintain steady rates for now. A sudden drop in rates could risk reigniting rapid price increases.
“I also want low prices and low interest rates,” said Martha Gimbel, who served as an economist in the Biden White House until early 2023. “That’s not the world that we’re in right now.”
Sanya Singh contributed to this report for TROIB News
The government has limited options for decreasing prices universally—any significant reduction would likely require a substantial reduction in economic activity, which could trigger a recession. Even efforts to implement policies aimed at lowering prices in specific sectors, such as groceries, can prove to be quite difficult.
In an executive order consisting of five paragraphs, signed in his first week back in office, Trump indicated his intention to prioritize deregulation as a method of cost reduction. This approach, while it could enhance corporate profits and potentially spur economic growth, does not assure that businesses will lower their prices.
Trump has also expressed a commitment to controlling the cost of living, while simultaneously urging the Federal Reserve Board to decrease interest rates. However, the Fed appears to be maintaining higher rates to manage inflation, with its next meeting on Wednesday expected to reflect this stance.
“If it was so simple, they would just do it,” remarked Norbert Michel, a vice president at the libertarian-leaning Cato Institute, in reference to the challenge of lowering prices.
The implications of this goal are significant for Trump. Lowering living costs was a key element of his reelection campaign, and many American households still prioritize this issue. Nevertheless, he is already grappling with the practical difficulties of addressing a prominent consumer concern: in recent weeks, egg prices have surged due to an avian flu outbreak that has decimated chicken populations.
Tensions also arise from corporate interests regarding what Trump is promising voters. He has vowed to boost oil production to lower gas prices. However, oil companies typically respond to increased prices by expanding their output, given that they are influenced by global market prices.
Rory Johnston, an oil market analyst at Commodity Context, stated, “there’s a split here between physical capacity and what’s economically likely to happen,” indicating that while there is potential for increased U.S. oil production, the prevailing economic conditions may not favor it.
“The only thing that’s going to get you more production is higher prices,” he asserted.
Simultaneously, the administration is contemplating significant tariffs on imports from all U.S. trading partners, which could lead to increased costs.
Early indications show that consumers might be doubtful about the administration's ability to lower prices. According to a survey conducted by the Associated Press-NORC Center for Public Affairs Research, a majority of Americans are skeptical of the administration's prospects for success in this area.
Vice President JD Vance, speaking on CBS’ "Face the Nation," noted that the administration aims to raise wages relative to prices, a strategy economists believe is more advantageous for the economy over the long run when compared to directly lowering prices.
According to the Bureau of Labor Statistics, inflation-adjusted wages saw a 1 percent increase throughout 2024, though they declined for much of President Joe Biden’s term.
Despite this, Vance reiterated that Trump would ultimately lighten the financial load for Americans, asserting, “Prices are going to come down, but it’s going to take a little bit of time.”
White House deputy press secretary Anna Kelly emphasized that Trump took immediate steps “to unleash American energy, which will drive down costs for families across the country,” and claimed that he has already reversed economic policies of the previous four years that contributed to inflation.
Nevertheless, Trump himself acknowledged in a recent interview with Time Magazine that “it’s hard to bring things down once they’re up.”
While there are approaches through which his administration might slow price increases, achieving this won't be straightforward. For instance, Trump intends to expand the housing supply to tackle the affordability crisis, but this construction could be hampered by state and local regulations beyond federal control.
Progress in managing avian flu could also help mitigate food inflation.
However, the current high borrowing costs, implemented by the Fed to curb inflation, place additional strain on consumers, particularly those looking to purchase homes or vehicles.
Inflation has significantly decreased since its peak in June 2022, but progress has stagnated in recent months, suggesting the Fed may maintain steady rates for now. A sudden drop in rates could risk reigniting rapid price increases.
“I also want low prices and low interest rates,” said Martha Gimbel, who served as an economist in the Biden White House until early 2023. “That’s not the world that we’re in right now.”
Sanya Singh contributed to this report for TROIB News
