Larry Kudlow: Media's False Narratives on Trump Tariffs and Inflation

Media's Inflation Narrative

• 💡 The media, particularly the Wall Street Journal and New York Times, are falsely blaming a recent 0.3% rise in the CPI on Donald Trump's tariffs.
• 🎯 These outlets are accused of using "tariff hysteria" to cover up for Jay Powell's incompetence and to frame Trump.

CPI Data Analysis

• 📊 The CPI has only increased by 1.8% annually since January, which is below the Fed's 2% target.
• 📈 Core CPI has risen 2.1% over the same period.
• 💰 Trump's supply-side policies, including tax cuts and deregulation, have not yet taken effect but are expected to curb inflation.
• 📉 Blue-collar wages have risen faster than prices during Trump's first five months, a contrast to "Biden inflation."

Factors Influencing CPI

• ⛽ A 1% jump in gasoline prices is attributed to seasonal adjustments, not actual nationwide price increases.
• 🚗 New and used car prices have fallen, and overall goods prices (most sensitive to tariffs) have risen only 0.7% over three months.
• 👕 Apparel prices have actually fallen by 0.8% over the past three months.

Broader Economic Context

• 🧐 The CPI includes 80,000 prices across 200 categories, making it easy for media to selectively highlight increases.
• ⚠️ The peak of Biden inflation was 9%, with cumulative price increases over 20% during his presidency.
• 📉 Trump's inflation rate remained well under 2% during his first term, even with Chinese tariffs, and is expected to stay low in his second term.
• 🏦 The Federal Reserve's target rate of 4.5% is considered too high, and the real issue is Jay Powell's mismanagement of monetary policy and the bank's losses.