Inflation in the United States has cooled to its lowest level in months, offering some relief to households weary from persistent price hikes, even as political drama swirls around the future of the Federal Reserve. On Thursday, government data revealed that consumer prices rose 2.7% in November 2025 compared to the previous year, a notable step down from September’s 3% annual inflation and the slowest pace since July. For many Americans, the news couldn’t come soon enough, but beneath the surface, the economic picture remains far from simple.
According to the Bureau of Labor Statistics (BLS), while the overall inflation rate has slowed, some everyday essentials are still getting pricier. Coffee prices soared nearly 19% in November over the same month last year, and beef wasn’t far behind, climbing almost 16%. On the flip side, egg prices tumbled 13%, providing some comfort for breakfast lovers. The fresh inflation data was the first comprehensive look in nearly two months, after a 43-day government shutdown hampered data collection and left economists and policymakers flying partially blind.
The White House, eager to tout economic progress, wasted no time in framing the inflation report as a victory. As ABC News reported, White House Press Secretary Karoline Leavitt stated, “Just as President Trump told Americans last night: inflation continues to fall, wages continue to rise, and America is trending towards a historic economic boom.” In a televised address, President Trump claimed credit for bringing the economy "back from the brink of ruin," asserting that his administration has brought prices down across the board, from gasoline and groceries to airfare and hotels. Yet, according to the BLS, some of these claims appear exaggerated or unverifiable.
Despite the slower pace of price increases, the reality is that prices themselves are still higher than they were a year ago. For many, paychecks are still being stretched thin. And while the inflation report offered a glimmer of hope, other key economic indicators have raised fresh concerns. The U.S. added just 64,000 jobs in November, down sharply from September’s 119,000, and the unemployment rate ticked up to 4.6%—the highest since 2021, though still low by historical standards. Meanwhile, retail sales were flat in October, despite the kickoff of the holiday shopping season, according to U.S. Census Bureau data.
Amid these mixed signals, the Federal Reserve made its third interest rate cut of the year last week, lowering its benchmark rate by a quarter percentage point to a range of 3.5% to 3.75%. The move was aimed at giving the sluggish labor market a boost, but it also reflected the central bank’s ongoing struggle to balance its dual mandate: keeping inflation in check while maximizing employment. As Fed Chair Jerome Powell put it at a recent press conference, “There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals.” The Fed’s next meeting is set for January 2026, with market odds favoring a pause, though a small chance of another cut remains.
Yet, the Fed’s independence—and its very approach to monetary policy—are at the center of an escalating political storm. President Trump has made no secret of his dissatisfaction with current Fed Chair Jerome Powell, whom he appointed in 2018 but has since publicly berated. As The Conversation detailed, Trump has called Powell a “clown” and has even attempted to oust Fed governor Lisa Cook through Justice Department investigations, though the charges appeared baseless and Cook remains in her post.
Now, with Powell’s term winding down, Trump is preparing to name a new Fed chair. In a national address on December 17, 2025, Trump declared, “I’ll soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates, by a lot, and mortgage payments will be coming down even further.” As reported by Reuters, Trump’s shortlist includes White House economic adviser Kevin Hassett, former Fed governor Kevin Warsh, and current governor Chris Waller. All have advocated for lower rates than today’s, but none have promised to slash them to the crisis-level 1% Trump has demanded.
Trump’s desire for lower mortgage rates is well known, but as Reuters noted, the Fed’s control over long-term borrowing costs is limited. Mortgage rates are more closely tied to the 10-year Treasury yield, which is driven by investor expectations for growth and inflation, and have remained stubbornly stuck between 6.3% and 6.4% since early September. Still, Trump insists the next Fed chair should consult with him on rate decisions—a break from modern tradition, as presidents typically leave such calls to the central bank. “Typically, that’s not done any more. It used to be done routinely. It should be done,” Trump told The Wall Street Journal. “It doesn’t mean – I don’t think he should do exactly what we say. But certainly we’re – I’m a smart voice and should be listened to.”
The prospect of presidential influence over the Fed has sparked alarm among economists and historians, who point to the turbulent 1970s as a cautionary tale. Back then, President Nixon pressured Fed Chair Arthur Burns to keep rates low, resulting in a toxic mix of high inflation and unemployment—stagflation. Inflation soared to 11% and joblessness to 8.5%. It took Paul Volcker’s “shock therapy”—raising rates to a punishing 19%—to finally break the back of inflation, but at the cost of deep recession and pain for millions of Americans.
With some economists warning that signs of stagflation may be re-emerging in 2025, the stakes for the Fed’s next leader are high. Prediction markets, according to The Conversation, suggest Kevin Hassett is a frontrunner, favored for his loyalty to Trump and his dovish stance on rates. Kevin Warsh, once known as an inflation hawk, also appears to have reassured Trump that he shares the president’s goals. Chris Waller, meanwhile, has a reputation for defending Fed independence, but even he is seen as more open to lower rates than Powell.
Ultimately, the central question remains whether the next Fed chair will maintain the institution’s independence or succumb to political pressure. Central bank independence, as many economists argue, is crucial for long-term economic stability. Short-term rate cuts might juice the economy, but the risk is a return to runaway inflation—or worse, stagflation. As the drama unfolds, financial markets, consumers, and the world at large are left to watch and wait, unwilling participants in a high-stakes political contest with far-reaching consequences.
For now, Americans can take some comfort in the recent slowdown in inflation, but the road ahead for the economy—and the Federal Reserve—remains uncertain, shaped as much by political maneuvering as by economic fundamentals.
