Trump Claims Inflation Defeated – Economists Disagree
In the war on affordability, President Donald Trump has claimed victory over inflation.
Trump saeid during a speech Wednesday in Davos,Switzerland,that he had “defeated” inflation and reined in consumer prices over the past year.
In an address to world leaders and others at the World Economic Forum, trump said that the U.S. has “virtually no inflation.”
“Grocery prices,energy prices,airfares,mortgage rates,rent and car payments are all coming down,and they’re coming down fast,” Trump said in a wide-ranging speech,adding: “we’ve done a hell of a job in 12 months.”
However, federal data suggests some of those claims are overblown.
Inflation is a measure of how fast prices are rising for consumers. The Federal Reserve, the U.S. central bank,aims for an annual inflation rate of around 2% over the long term.
The consumer price index, or CPI, a key measure of U.S. inflation, was at a 2.7% annual rate in December – a rate that economists say remains elevated.
“To say the US has ‘virtually no inflation’ is factually incorrect and a classic Trump overstatement,” thomas Ryan, a North america economist at Capital Economics, wrote in an e-mail.
Core CPI – a measure that strips out energy and food prices, which can be volatile – “remains uncomfortably high for policymakers at 2.6%,” Ryan wrote.
President Donald Trump speaks as Borge Brende, the president and CEO of the World Economic Forum, listens during the forum’s 56th annual meeting in Davos, Switzerland, Jan. 21, 2026.
Jonathan Ernst | Reuters
Mark Zandi, chief economist at Moody’s, also told CNBC that inflation remains “uncomfortably high.”
“Inflation is especially problematic for lower and middle-income Americans, given the high inflation for many staples such as groceries, electricity, apparel, furniture, childcare, and healthcare,” Zandi wro
Housing Costs Ease, But Car Payments Climb
Americans are seeing some relief in housing costs, with both mortgage rates and rents trending downward. Though, this positive news is offset by rising car payments, creating a mixed picture for household budgets.
Mortgage Rates
Mortgage rates have fallen from their recent peaks. As of January 18, 2026, the average 30-year fixed mortgage rate stood at 6.6%, according to Freddie Mac data. Freddie Mac’s Primary Mortgage Market Survey shows rates have decreased from a high of 7.79% in October 2023. However, most homeowners with fixed-rate mortgages will not see a change in their payments unless they refinance or purchase a new property.
Rent
Rent payments have also been declining. The national rent index fell 0.8% in December, marking five consecutive months of decreases, according to Apartment List’s monthly report. This was the steepest winter decline sence 2022.Nationally, rents are down 1.3% year-over-year, with the national median monthly rent now at $1,356. Bankrate’s Kates notes that increased apartment construction in some areas is driving down rental prices.
Car Payments
Car payments are increasing despite slightly lower interest rates on new car loans. Shoppers are financing larger loan amounts,pushing the average monthly payment for a new vehicle to a record high. CNBC reported that the average monthly payment has surpassed $1,000.