President Donald Trump expressed enthusiasm for the December 2025 inflation data released on January 13, 2026, viewing it as validation for his ongoing campaign to pressure Federal Reserve Chair Jerome Powell into implementing substantial interest rate reductions. Speaking to reporters before heading to Detroit, Trump highlighted the figures as evidence of “very low inflation,” suggesting they provided Powell—whom he nicknamed “too late Powell”—an opportunity for a “nice beautiful big rate cut.” Earlier that day, Trump took to social media to emphasize that the numbers warranted Powell to “cut interest rates, MEANINGFULLY,” reinforcing his belief that lower rates would stimulate economic growth and ease borrowing costs amid persistent fiscal challenges. This response aligns with Trump’s history of publicly critiquing the Fed’s monetary policy decisions during his presidency.

The inflation report from the Labor Department’s Bureau of Labor Statistics showed consumer prices rising 0.3% in December, matching the previous month’s increase, while the annual CPI advanced 2.7%, consistent with November’s rate. The core CPI, excluding volatile food and energy prices, came in at 2.6% year-on-year, slightly below the 2.7% anticipated by economists, indicating a modest cooling in underlying price pressures. These figures reflected an unwinding of distortions from a prior government shutdown that had temporarily suppressed November’s readings, solidifying market expectations that the Fed would hold rates steady in the near term despite the overall inflation remaining above the central bank’s 2% target.

Trump’s comments underscore a broader, contentious relationship with the Federal Reserve, marked by repeated calls for aggressive rate cuts to bolster the economy and reduce the government’s debt servicing expenses. Although the Fed has lowered its key rate in recent meetings to support a softening job market, Powell has signaled a cautious approach, potentially pausing further adjustments to monitor economic developments. This ongoing feud has included threats to oust Fed officials and legal actions, highlighting tensions between the executive branch and the independent central bank as Trump seeks to influence policy in favor of expansionary measures.

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