The Dictatorship
Trump says inflation is ‘defeated’ and the Fed has cut rates, yet prices remain too high for many
WASHINGTON (AP) — Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.
Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”
And at a high-profile speech in Augustjust before the Fed cut its key interest rate for the first time this yearFederal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”
Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2% poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.
The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong — if inflation gets worse or remains elevated for longer than expected — the Fed’s inflation-fighting credibility could take a hit.
That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps — such as demanding sharply higher pay when prices rise — that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.
But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.
“If that proves to be the case, in hindsight it will be that the Fed cuts — and I do expect several more — are going to be seen as a mistake,” Dynan said.
So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1% peak three years ago. Still, consumer prices increased 2.9% in August from a year earlier, up from 2.6% at the same time last year and above the Fed’s 2% target.
The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.
Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2% in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.
The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7% in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21% in the past year, partly because Trump has slapped 50% import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests.
Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.
But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.
“It is a big gamble after what we’ve been going through … to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3% inflation) would have been considered really high.”
Just two weeks ago, Trump slapped new tariffs on a range of productsincluding 100% on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, and 25% on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.
Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”
Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10% this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45% of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.
Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145% earlier this year. Production resumed after Trump reduced the duties to 30% but at a slower pace.
Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.
“At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”
Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.
“The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”
Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.
“I’m more sanguine about the inflation outlook than a lot of other people are,” he said.
In an explosive interview with NBC aired Sunday, President Donald Trump cut the grilling short and left the set after peppering “Meet the Press” moderator Kristen Welker with insults.
“You’re either crooked or you’re stupid,” Trump told Welker, who kept a cool demeanor despite the president’s barrage of disparaging slurs.
Moments before he attacked her, Trump — without providing any evidence — said he believes elections in the U.S. are rigged. Then he lambasted television news networks, singling out NBC, CBS and ABC.
“They’re crooked just like you’re crooked, your press is crooked. And ‘Meet the Press’ is crooked,” Trump said.
“To be fair, I’m not crooked,” Welker shot back. “But let’s continue.”
“Let’s call it quits because I’ve had enough,” the president told Welker, who is the second woman and first Black journalist to helm the network’s flagship program.
Trump added, “Thank you, darling. Have a good time.”
It was not the first time Trump has berated a female journalist on the job covering his presidency.
In November 2025, he told Bloomberg’s Catherine Lucey to stop talking, saying, “Quiet. Quiet, piggy.” One month later, he told ABC’s Rachel Scott she was “the most obnoxious reporter in the whole place.” Last month, he called MS NOW White House reporter Akayla Gardner “a dumb person” for pointing out that the cost of his White House ballroom project had doubled since it was first announced.
He has also repeatedly lashed out at CNN’s Kaitlan Collinscriticizing her for not smiling enough.
The wide-ranging interview, which was taped last week on a farm in Wisconsin, was interrupted by the loud sound of heavy rain on the metal roof of the barn where they met. Welker questioned Trump on his war with Iran, his “anti-weaponization” fund and the upcoming midterm elections.
On his nearly $1.8 billion fund aimed at compensating people who say they were wrongly prosecuted, including Jan. 6 Capitol rioters, Trump said “people were destroyed by dirty cops and by weaponization. Many of those people should be compensated.”
He described the people who stormed the Capitol on Jan. 6, 2021, as people who were “being ushered into the building” by law enforcement.
A federal judge temporarily blocked the fund last month and acting Attorney General Todd Blanche said last week the administration would not be moving forward with the fundwhich faced bipartisan backlash.
When asked if the administration would pursue other avenues to revive it, Trump said he does not know what will ultimately happen and called Welker and her network “the fake dirty press.”
Despite campaigning on a promise to end foreign wars, Trump denied that he made such statements. He characterized the Iran war, launched by the U.S. and Israel on Feb. 28, as necessary to prevent Iran from developing a nuclear weapon.
When asked about the rising cost of living as a result of the war, specifically gas and fertilizer, Trump chastised Welker.
“Are you ready? Am I allowed to talk? You keep asking questions and you don’t listen to the answers,” he said.
“I love the farmers and the farmers love me,” Trump said, adding that prices will come down after the war.
Welker suggested to her viewers Sunday that she and the president had a cordial conversation Saturday, saying they both “acknowledged the complications” posed by the rain. “He agreed to sit down with me for another ‘Meet the Press’ interview,” she said.
Erum Salam is a breaking news reporter for MS NOW, with a focus on how global events and foreign policy shape U.S. politics. She previously was a breaking news reporter for The Guardian.
Iran said visas were denied to key members of its national soccer team ahead of the World Cupwhich a U.S. official insisted was necessary so that Iran does not try to “sneak terrorists into the United States.”
In a post on Xthe Iranian embassy in Turkey said “visas were denied to a large portion of the managerial and executive staff, technical advisers, and others” on its team.
“You have now escalated the deliberate and discriminatory treatment against Iran’s national football team to its highest level,” the embassy said, accusing the U.S. of the “worst possible form of politically biased interference in sport” and “depriving Iran’s national team of its right to play in the World Cup under normal conditions.”
Iranian officials are accusing the U.S. government of violating FIFA regulations and breaching its obligations as one of the host countries of what is widely regarded to be the biggest sporting event in the world. The diplomatic standoff between the two countries comes just days before the World Cup is set to kick off and more than three months after the U.S. and Israel waged war against Iran.
A Trump administration official who was granted anonymity to speak candidly about the subject told MS NOW in a statement that the visas “necessary for Iran to compete in the World Cup, including for athletes and necessary support staff, have been issued.”
The official added, however, “We will not allow the Iranian team to abuse this system to sneak terrorists into the United States under false pretenses.”
The statement from the Iranian Embassy in Turkey came in response to a post on X by U.S. Ambassador to Turkey Tom Barrack praising embassy staff for processing visas for the Iranian national team.
According to The Associated Presssome of the team’s officials have not received visas to enter the U.S., which is co-hosting the World Cup with Mexico and Canada. Games are set to begin Thursday.
Problems with getting U.S. visas had already led Iran to move its World Cup training base from the U.S. to Mexico. But Iran is still listed on the official World Cup schedule to play its first two games in Los Angeles on June 15 against New Zealand, and against Belgium six days later before heading to Seattle to face Egypt.
The Iran Football Federation’s secretary-general and its vice president were among 14 staff and officials without U.S. visas, AP said, citing Iranian state television. The federation reportedly accused the U.S. of “vindictive behavior.”
Emily Hung contributed to this report.
Clarissa-Jan Lim is a breaking news reporter for MS NOW. She was previously a senior reporter and editor at BuzzFeed News.
A shooting near a community festival in Toledo, Ohio, wounded at least 12 people, and police said a search for the suspects was ongoing following an outbreak of gunfire that sent crowds scrambling for cover.
Two of the wounded were in critical condition, Toledo Deputy Police Chief Joe Heffernan said. He said it appeared there were at least two people firing weapons who were “probably shooting at each other.”
The Toledo Police Department said the shooting happened near the Old West End Festival, an annual gathering of live music and home tours in a historic district of the city.
The department said an active search was underway for those responsible.
“I am deeply concerned about the situation in Toledo tonight. Summer festivals should be safe spaces for families to spend time together without fear of violence,” Ohio Gov. Mike DeWine said in a statement.
Multiple videos posted to social media showed people running over the sound of gunshots and emergency officials tending to others who appeared wounded.
Kevin Berry said he was sitting in the neighborhood arboretum listening to live music with his friends when he heard a handful of gunshots ring out.
“Everybody hit the deck,” he said.
When he looked back up, he saw a gun being tossed to the ground less than 50 feet (15 meters) away from him. Police officers who were already on-site for the festival immediately responded to the scene.
Berry, who has medical training and served in the U.S. Navy, said he walked around the area looking for potential victims who might need help.
He said he saw at least five people with gunshot wounds.
“The folks who were hit were spread out around the arboretum area,” he said.
The Old West End Festival is a two-day celebration in Toledo’s historic district that includes live music, food vendors, home tours and shopping.
Berry described it as the “kick-off to Toledo’s summer festival season.”
This is a developing story. Check back for updates.
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