Meanwhile, Inflation Creeps Upward

So reports the NYT:

The White House opted to try to downplay the latest inflation gauge, which showed that prices overall rose 2.7 percent from a year ago, the swiftest pace since February.

One will grant that 2.7% is not a large number, but we are going in the wrong direction (especially if Trump wants interest rates lowered).

The tariffs are a major component of the story.

Prices rose noticeably on appliances, clothing and furniture, products that are all heavily exposed to the president’s taxes on imports from Canada, China and other major trading partners.

It is worth noting that while on the one hand, Trump has, in fact, chickened out on some of the initial tariffs that were issued, and he may yet TACO the August 1 deadline that he has set. On the other hand, even with some of the more dramatic numbers perhaps not being deployed, current tariff levels are higher than they have been in a very long time. So reports Yale’s The Budget Lab as of July 14, 2025:

Current Tariff Rate: Consumers face an overall average effective tariff rate of 20.6%, the highest since 1910. After consumption shifts, the average tariff rate will be 19.7%, the highest since 1933.

See, also, Krugman: Hawks, Doves and Lapdogs.

I, however, am a TACO skeptic. I think Trump really is a Tariff Man who will keep us at Smoot-Hawley-level tariffs indefinitely, and businesses will eventually realize that and raise prices accordingly.

And then what? Clearly, we shouldn’t expect Trump to admit that his tariffs are raising prices, or even to admit that prices are rising. What we can expect is that he will keep putting pressure on the Fed to cut interest rates. I don’t think he’ll manage to push Jerome Powell out before next May, but as I wrote last week, whoever he picks after that will do his bidding.

None of this is good, and the damage will be real if Trump gets what he wants.

Meanwhile, imagine if Joe Biden didn’t remember who he appointed to be Fed Chair?

If I am charitable, I can interpret Trump as referring only to the reappointment of Powell as Chair by Biden. But even that interpretation has Trump utterly ignoring that he was the one who appointed Powell in the first place.

I will hasten to add that if this were Biden in the clip saying the exact same thing, right-wing media would be merciless in their coverage.