On Tuesday evening, December 9, 2025, President Donald Trump took the stage in Mount Pocono, Pennsylvania, with a message that was as bold as it was optimistic: "Prices are coming down tremendously." Standing before a crowd and the nation, Trump asserted that his administration’s economic policies were making life more affordable for Americans. Yet, as recent economic data and expert commentary reveal, the reality for many households is far more complicated.
Inflation, which had dipped to a low of 2.3% in April, has been creeping upward, reaching the same level in December as when Trump was inaugurated in January 2025, according to federal data reported by CBS News. Economists point to a range of factors, but one stands out: the Trump administration’s tariffs. Federal Reserve Chair Jerome Powell, speaking just a day after Trump’s remarks, highlighted these levies as a key driver behind the recent uptick in inflation. "Inflation now is higher than earlier in the year as inflation for goods has picked up, reflecting the impact of tariffs," Powell said at a press conference on December 10, 2025. He explained that the effect of tariffs would likely result in a one-time price increase, which should fade over the coming year.
Despite the president’s confident tone, Wall Street analysts are less sanguine about the immediate outlook. Mark Vickery, a senior market analyst at Zacks Investment Research, estimated that the Consumer Price Index (CPI) rose at an annual rate of around 3.3% in November. The Federal Reserve projects that inflation will recede to 2.4% in 2026, down from about 2.9% in 2025, but the journey there is not without bumps. Inflation has indeed fallen sharply from its 40-year high of about 9% in June 2022, but for most Americans, that’s little comfort.
Why? Because, as University of Florida research cited by CBS News points out, shoppers don’t experience inflation as an abstract number—they feel it every time they buy groceries, pay their utility bills, or fill up their gas tanks. And by those measures, the cost of living remains stubbornly high. In September 2025, Americans were paying 2.7% more for groceries than a year earlier, with overall grocery bills up roughly 49% since 2020. Some items, like beef steaks, have surged even more dramatically. Anne Marie Hadley, a retired special education teacher shopping in Scranton, Pennsylvania, summed up the situation: "The cost of beef is astronomical. I will mainly get what’s on sale."
The Trump administration has taken steps to address food costs, including removing tariffs on coffee and bananas from specific countries earlier this month. But these efforts have yet to make a noticeable dent in the average family’s grocery bill. It’s a familiar story for many: making tradeoffs, scrimping, and searching for sales just to keep food on the table.
Housing, too, remains a major source of financial strain. While mortgage rates have dropped somewhat this year, more than 75% of homes across the country are now unaffordable for the typical household, according to a recent Bankrate analysis. To afford a typical home in 2025, a buyer needs an annual income of $131,400—almost double the $65,000 required just five years ago, the Federal Reserve Bank of Atlanta reports. Nearly three-quarters of Americans said housing has grown more unaffordable in their communities in recent years, according to a YouGov and University of Florida poll.
Not all the economic news is grim. Gasoline prices have eased, with a 0.5% decline in September compared to a year earlier. In early December, some states even reported prices as low as $1.99 per gallon, the lowest since May 2021. Trump was quick to tout this in his speech: "It was just reported that four states had $1.99 a gallon. We are right now involved in more energy, and have more energy in the works by far than we’ve ever had before." The drop is attributed to strong refinery output, lower crude oil prices, and softer seasonal demand, according to GasBuddy analysts.
However, while drivers are getting a break at the pump, other energy costs are climbing. Residential electricity prices rose about 6% over the past year, and nearly 5% of U.S. households were seriously behind on utility bills as of June 2025. The average overdue balance on utility bills has jumped 32% in the past three years, from $597 to $789, according to reports from The Century Foundation and Protect Borrowers.
Trump’s speech in Mount Pocono was part of a broader effort to promote his economic agenda ahead of the 2026 midterm elections. He declared, "I have no higher priority than making America affordable." Yet, his messaging on affordability has been inconsistent. While he sometimes calls affordability a “hoax” invented by Democrats, others in his party, like Representative Marjorie Taylor Greene, disagree. "Everyone’s bills have either stayed the same or gone up. You can’t gaslight people and tell them that their bills are affordable," Greene told CBS News.
White House spokesman Kush Desai remains optimistic, arguing that Trump inherited "the worst inflation crisis in a generation from Joe Biden’s incompetence," but has since "rapidly cooled inflation to a 2.5% annualized rate." Desai credits the administration’s supply-side policies—tax cuts, deregulation, and energy expansion—for the progress, and promises that "Americans can count on inflation continuing to fall and real wages continuing to rise."
But the economic reality is more nuanced. According to CNN, both Trump and Powell, despite their often adversarial relationship and sharply different communication styles, largely agree on the core economic challenges and the solutions. Powell, in his briefing, acknowledged, "We are going to need to have some years where real compensation is higher … for people to start feeling good about the affordability issue." He explained that the Fed has lowered interest rates three times over the past four months to stimulate a slowing job market and help paychecks grow, even as inflation remains above the Fed’s 2% target, currently sitting at 2.8%.
Both men agree that the tariffs have caused a one-time jump in prices but won’t be inflationary over the long term. The real problem, Powell argued, is not the recent uptick in inflation, but the lingering impact of the price surges during the 2022 and 2023 inflation crisis. Americans are still adjusting to those elevated costs, which have become the new normal.
For Trump, the challenge is convincing a skeptical public that his policies are working. Consumer sentiment surveys and political polls consistently show that Americans are dissatisfied with the administration’s handling of the economy, frustrated by the high cost of living. It’s a budding political crisis for the president and his party, one that has forced Trump to hit the road and communicate the benefits of his agenda directly to voters.
Jerome Powell, for his part, has tried to strike a balance between controlling inflation and supporting the labor market. "We are trying to keep inflation under control, but also support the labor market and strong wages, so that people are earning enough money and feeling economically healthy again," Powell said.
In the end, while the headlines may tout falling inflation, the lived experience for most Americans is more complicated. Prices are rising more slowly, but they’re still rising—and from a much higher baseline than just a few years ago. As the nation heads toward the 2026 midterms, the debate over affordability, wages, and economic policy is likely to remain front and center, with both Trump and Powell offering their own prescriptions for relief.
For millions of households, the question isn’t just whether inflation is under control, but whether paychecks and policies will finally help them catch up to the new reality of American life.
