Inflation came in at 2.4% in May 2025, down from the 7% levels seen during Biden’s term. Prices are falling, but the celebration hasn’t started. Not because the numbers are wrong, but because the people in charge refuse to act like they’re right.
Jerome Powell, the one voice that can swing global markets with a sentence, looked at cooling inflation and called it “still elevated.” He warned about new tariffs and wage pressures. He spoke carefully, but the subtext was clear. No rush. No rate cuts. Not yet.
🇺🇸 FED CHAIRMAN JEROME POWELL JUST SAID:
– FED IS WELL POSITIONED FOR THE TIME BEING TO WAIT TO LEARN MORE ABOUT LIKELY COURSE OF ECONOMY BEFORE ADJUSTING POLICY
– INCREASED TARIFFS LIKELY TO PUSH UP ON INFLATION, WEIGH ON ECONOMIC ACTIVITY
— Evan (@StockMKTNewz) June 24, 2025
Trump saw that and didn’t hold back. He mocked Powell openly. Called him slow, political, stubborn. Publicly demanded lower rates. The old feud between Trump and Powell isn’t subtle anymore. It’s a headline generator and a policy tug-of-war with trillions on the line.
Powell stayed firm. The Fed’s core inflation tracker still sits around 2.8%. Wages have risen 4.1% year over year. Services and shelter remain sticky. Gas prices are lower, but housing and insurance have not let up. So despite progress, Powell holds the line. He wants broader disinflation before flipping the switch on rates.
Markets expected up to four rate cuts this year. That’s now down to two. Mortgage rates remain around 6.9%. Credit cards still charge over 20%. Car loans sit above 7%. Consumers aren’t feeling relief because real borrowing conditions have barely changed. Even with headline inflation easing, the cost of living remains historically elevated.
The White House touts progress. But progress doesn’t mean relief. The lag between better CPI prints and cheaper credit is long. And Powell has made it clear that any misstep on policy could bring inflation roaring back. That fear keeps him cautious. Trump sees that as sabotage. The Fed sees it as discipline.
What matters to families isn’t what inflation was, it’s what their interest rates are. They care if their mortgage refinance gets approved or if their credit card bill will balloon by month’s end. They care if groceries level off or if insurance premiums stay up. These details don’t wait for central bank minutes.
The real story isn’t just that inflation dropped. It’s that the pain hasn’t. And until the Fed acknowledges that 2.4% isn’t 7%, money will remain tight.
Sources:
https://www.bls.gov/news.release/cpi.nr0.htm
https://atlantafed.org/cqer/research/gdpnow
https://finance.yahoo.com/news/trumps-tariffs-highly-likely-cause-173557111.html