The president promised to lower prices. One year after he took office, his approval ratings are still on the rise. Here’s why:
President Trump slams Federal Reserve Chairman Jerome Powell over economic comments
President Donald Trump slammed Federal Reserve Chairman Jerome Powell following Trump’s comments about tariffs and their impact on the economy.
- Despite the president’s claims to beat inflation, current interest rates are about the same as they were when he took office.
- Gasoline prices have fallen markedly, but household utility bills and food prices continue to rise.
- Some economists say President Trump’s policies are not causing prices to fall, but rather making them higher than they would otherwise be.
Taming the U.S. economy is easier said than done, and President Donald Trump is learning the lesson.
A year after his administration returned to the White House, economic indicators show that nearly all of the challenges he promised to solve during his presidential campaign two years ago, including cutting energy costs in half, making housing more affordable and ending inflation, remain problems or are getting worse.
That hasn’t stopped the president from lashing out at his critics and proclaiming that prosperity is returning when faced with how unfulfilled his promises are, striking the same nerves among disaffected voters ahead of the 2026 midterm elections.
“Growth is exploding, productivity is soaring, investment is booming, incomes are rising,” President Trump said at the Detroit Economic Club on January 13. “Inflation has been defeated.”
In fact, the current inflation rate of 2.7% is roughly unchanged from the 2.8% inflation rate during President Trump’s first full month in office.
About 53% of U.S. adults say the nation’s economy has worsened somewhat or significantly since President Trump took office, an Associated Press-NORC Center for Public Affairs Research poll released two days after the speech found.
Trump’s affordability track record falls short of previous promises
As a candidate, Trump made several bold promises about how to quickly reduce the cost of living.
“From the day I take the oath of office, I will rapidly lower prices and make America affordable again,” he said at a rally in Wilkes-Barre, Pennsylvania, in August 2024.
No one expected him to actually stop inflation as he promised (though some price increases are necessary for economic growth), but inflation hasn’t come down as much as many would like.
The consumer price index in December rose 2.7% from the previous year. Inflation is much lower than its post-pandemic high of nearly 9%, but still higher than the Federal Reserve’s 2% target.
Importantly, some economists say Trump’s policies are not causing prices to fall, but rather keeping them higher than they would otherwise be. By the time President Trump took office on January 20, 2025, the inflation rate was declining. The inflation rate continued its downward trajectory to 2.3% in April 2025, but then rose again.
Retailers also swallowed a significant portion of the higher costs from several tariffs the White House imposed on foreign enemies and allies last year, but some of it is still passed on to consumers. A recent academic paper demonstrated that new tariffs increased current inflation by 0.7 percentage points.
The average tariff rate in January 2024 was approximately 3%. That rate currently hovers around 15%, according to the Yale Budget Institute, a nonpartisan policy research center that studies federal economic policy in the United States.
According to an AP-NORC poll released on January 15, about 58% of Americans said they believe new tariffs would go “too far.”
On the eve of the 2024 presidential election, Trump declared at a rally in Pittsburgh, Pennsylvania, that voting for him “means cheaper groceries.” That didn’t happen. Over the past 12 months, the meat, poultry, fish and egg price index has increased by 3.9%.
The White House did not respond to USA TODAY’s requests for comment, but conservative allies say the president should continue touting blitzkrieg strategies aimed at cutting costs.
On his first day as president, Trump signed a series of executive orders, including declaring a national energy emergency. The U.S. Department of Energy claims President Trump lowered gasoline prices by eliminating regulations.
“In terms of actual policy, President Trump is messing with the kitchen sink in terms of executive orders,” Peter St. Onge, senior economist at the Heritage Foundation, said in an interview.
He points out that Congress — even though Republicans control both chambers of Congress — has quietly resisted some of the administration’s demands for deep cuts in federal regulation and spending.
“The point is, Congress has to do most of the heavy lifting on the economy,” said St. Onge, a conservative policy contributor known as Project 2025. “He’s working on executive orders. There’s only so much he can do.”
But Democrats say Trump’s actions are more likely to raise prices than lower them.
“There were some very active policy decisions, probably some of the most active policy decisions we’ve ever seen in a first year, but most of those policies were going in directions that economists would find problematic, such as unprecedented increases in the average rate of tariffs that consumers ultimately pay,” said Ben Harris, director of economic research at the Brookings Institution and chief economic adviser to then-Vice President Joe Biden.
President Trump promised to cut energy costs in half, but energy costs have risen.
President Trump’s most ambitious promise may have been to cut energy bills in half.
“We will cut energy and electricity prices in half within 12 months, up to 18 months,” President Trump said at a rally in August 2024.
Household utility costs jumped 41% between 2020 and 2025, according to a September analysis by JD Power based on electricity, household gas and water prices from the second quarter of each year. The report says these costs have increased 5% since January 2025, although much of that increase occurred before President Trump took office.
The price per kilowatt-hour of electricity rose from 17.9 cents in January 2025 to 18.9 cents in December 2025, according to the St. Louis Fed.
According to AAA, consumers are seeing a noticeable drop in gasoline prices, which as of Jan. 15 were about $2.84 per gallon nationwide, down from $3.09 a year ago. This is still significantly higher than the “less than $2 per gallon” gasoline price promised by President Trump in his speech at the New York Economic Club in September 2024.
The Trump administration is trying to increase oil supplies by leasing more federal land and water to drill and control Venezuela’s oil industry, but these steps take years to ramp up production and only 1% of U.S. electricity comes from oil.
Is Trump helping people achieve the American Dream?
Research shows that while homeownership remains an important milestone for most Americans, homeownership is becoming out of reach for many as homes remain rare and expensive for buyers.
In a speech in September 2024, President Trump said that “lowering mortgage rates” would lead to more young people buying homes. “We intend to bring them back to 3% or even lower,” he added.
Bankrate, which compiles mortgage interest rates daily, reported on January 16 that the average interest rate for a 30-year fixed-rate mortgage was 6.11%. That’s lower than the 7.04% rate when Trump took office, but still higher than Trump and many homebuyers would like. Many of the same factors are keeping inflation and interest rates higher than he expected, including expectations for increased government borrowing and uncertainty from tariffs to Federal Reserve appointments.
The median price of existing homes sold in December was $405,400, up just 0.4% from a year ago.
Still, prices have increased significantly over the past few years, forcing many young people out. The National Association of Realtors announced in November that the proportion of first-time buyers in the market was at an all-time low of 21%, and the average age was at an all-time high of 40.
In the same speech, President Trump said, “We will eliminate regulations that drive up housing costs, with the goal of cutting the price of new housing in half.”
The National Association of Home Builders, a lobbying group, says the regulations could add about $94,000 to the price of new homes.
NAHB CEO Jim Tobin told USA TODAY that President Trump has taken several important steps toward streamlining the regulatory burden, including rolling back the Clean Water Act.
But the most onerous regulations come from local governments, Tobin said, limiting the White House’s influence.
According to NAHB, census data through October shows that construction costs for a typical single-family home have increased by just 3.1% compared to October 2024.
President Trump recently floated the possibility of banning Wall Street investors from buying single-family homes, but his administration has rolled back regulations that favored residential buyers over institutional investors.
Republican message: ‘The best is yet to come’
One area where Mr. Trump’s allies see a glimmer of hope in changing voter attitudes before the fall election is the expected benefits of making permanent the 2017 tax cuts of Mr. Trump’s first term, including increasing the child tax credit cap from $200 to $2,200 and creating a partial income tax exemption for tipped workers such as bartenders, hall staff and food service workers.
Democrats have regularly criticized the proposal for unfairly benefiting the wealthy while cutting programs for the poor, such as Medicaid.
More than two-thirds of the total tax cuts will go to households with incomes of $217,000 or more, and one-quarter of the cuts will go to households with incomes of $1.1 million or more, according to an analysis by the Tax Policy Center. Americans with incomes less than $50,000 will lose an average of $700 due to social spending cuts.
In December, the president predicted in a prime-time White House speech that 2026 would be the “biggest tax refund season in history,” and experts say filers could see significantly higher refunds this year.
That would be good news for Republican incumbents and other candidates planning to vote this year in preparation for a Democratic wave.
Mike Marinella, a spokesman for the National Republican Congressional Committee, the political arm of House Republicans, said Democrats have spent years “teaching families to endure” a collapsed economy, but that conservative lawmakers have worked with Trump to cut taxes and better manage the economy.
“This is what happens when Republican leadership replaces Democratic Party failures,” he said. “The contrast could not be more stark, but the best is yet to come.”
But experts say President Trump’s new tax law will widen the budget deficit and raise borrowing costs. The more the federal government borrows, the more bond buyers are likely to demand higher interest rates.
Yale Budget Lab estimates that by 2054, the 10-year Treasury yield will be 1.4 percentage points higher than it would have been without the bill, pushing up interest rates on everything from homes to cars.
