TRUMP, INFLATION, AND ‘DAY ONE.’ Yesterday’s newsletter noted that the new inflation report to be released Wednesday would bring home the message that “Joe Biden brought inflation on but was unable to fully get rid of it.” And indeed, with the report came word from the Bureau of Labor Statistics that inflation increased 3% on an annual basis in January, up slightly from December, which was up slightly from November, which was up slightly from October, which was up slightly from September. 

The consumer price index has been creeping upward since the fall of 2024. Yes, it fell from the disastrous level of 9.1% in June 2022, but today it is still above the Federal Reserve’s target for getting rid of inflation, a development Austan Goolsbee, the head of the Federal Reserve Bank in Chicago, called “sobering.” In an interview with the New York Times, Goolsbee said, “There’s no question, if we got multiple months like this, then the job is clearly not done.” The new numbers suggest the Fed is certainly not going to cut interest rates anytime soon and might in fact raise them.