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.
The Dictatorship
Labor Secretary Lori Chavez-DeRemer is leaving Trump’s Cabinet
WASHINGTON (AP) — Labor Secretary Lori Chavez-DeRemer is out of President Donald Trump’s Cabinet, the White House said Monday, after multiple allegations of abusing her position’s power, including having an affair with a subordinate and drinking alcohol on the job.
Chavez-DeRemer is the third Trump Cabinet member to leave her post after Trump fired his embattled Homeland Security Secretary Kristi Noem in March and ousted Attorney General Pam Bondi earlier this month.
In a statement posted on social media, Chavez-DeRemer praised Trump and wrote, “I am proud that we made significant progress in advancing President Trump’s mission to bridge the gap between business and labor and always put the American worker first.”
Unlike other recent Cabinet departures, Chavez-DeRemer’s exit was announced by a White House aide, not by the president on his social media account.
“Labor Secretary Lori Chavez-DeRemer will be leaving the Administration to take a position in the private sector,” White House communications director Steven Cheung said on the social media site X. “She has done a phenomenal job in her role by protecting American workers, enacting fair labor practices, and helping Americans gain additional skills to improve their lives.”
He said Keith Sonderling, the current deputy labor secretary, would become acting labor secretary in her place. The news outlet NOTUS was the first to report Chavez-DeRemer’s resignation.
Labor chief, family members faced multiple allegations
Chavez-DeRemer’s departure follows reports that began surfacing in January that she was under a series of investigations.
A New York Times report last Wednesday revealed that the Labor Department’s inspector general was reviewing material showing Chavez-DeRemer and her top aides and family members routinely sent personal messages and requests to young staff members.
Chavez-DeRemer’s husband and father exchanged text messages with young female staff members, according to the newspaper. Some of the staffers were instructed by the secretary and her former deputy chief of staff to “pay attention” to her family, people familiar with the investigation told the Times.
Those messages were uncovered as part of a broader investigation of Chavez-DeRemer’s leadership that began after the New York Post reported in January that a complaint filed with the Labor Department’s inspector general accused Chavez-DeRemer of a relationship with the subordinate.
She also faced allegations that she drank alcohol on the job and that she tasked aides to plan official trips for primarily personal reasons.
Late Monday, on her personal X account, Chavez-DeRemer posted, “The allegations against me, my family, and my team have been peddled by high-ranked deep state actors who have been coordinating with the one-sided news media and continue to undermine President Trump’s mission.”
Both the White House and the Labor Department initially said the reports of wrongdoing were baseless. But the official denials got less full-throated as more allegations emerged — and when Chavez-DeRemer might be out of a job became something of an open question in Washington.
At least four Labor Department officials have already been forced from their jobs as the investigation progressed, including Chavez-DeRemer’s former chief of staff and deputy chief of staff, as well as a member of her security detail, with whom she was accused of having the affair, The New York Times reported.
“I think the secretary demonstrated a lot of wisdom in resigning,” Sen. John Kennedy, R-La., said Monday after her departure was made public.
She enjoyed union support — rare for a Republican
Confirmed to Trump’s Cabinet on a 67-32 vote in March 2025, Chavez-DeRemer is a former House GOP lawmaker who had represented a swing district in Oregon. She enjoyed unusual support from unions as a Republican but lost reelection in November 2024.
In her single term in Congress, Chavez-DeRemer backed legislation that would make it easier to unionize on a federal level, as well as a separate bill aimed at protecting Social Security benefits for public-sector employees.
Some prominent labor unions, including the International Brotherhood of Teamsters, backed Chavez-DeRemer, who is a daughter of a Teamster, for Labor Secretary. Trump’s decision to pick her was viewed by some political observers as a way to appeal to voters who are members of or affiliated with labor organizations.
But other powerful labor leaders were skeptical when she was tapped for the job, unconvinced that Chavez-DeRemer would pursue a union-friendly agenda as a part of the incoming GOP administration. In her Senate confirmation hearing, some senators questioned whether she would be able to uphold that reputation in an administration that fired thousands of federal employees.
She was a key figure in Trump’s deregulatory push
Aside from reports of wrongdoing in recent months, Chavez-DeRemer had been one of Trump’s more lower-profile Cabinet picks, but took key steps to advance the administration’s deregulatory agenda during her tenure.
For instance, the Labor Department last year moved to rewrite or repeal more than 60 workplace regulations it saw as obsolete. The rollbacks included minimum wage requirements for home health care workers and people with disabilities, and rules governing exposure to harmful substances and safety procedures at mines. The effort drew condemnation from union leaders and workplace safety experts.
The proposed changes also included eliminating a requirement that employers provide adequate lighting for construction sites and seat belts for agriculture workers in most employer-provided transportation.
During Chavez-DeRemer’s tenure, the Trump administration canceled millions of dollars in international grants that a Labor Department division administered to combat child labor and slave labor around the worldending their work that had helped reduce the number of child laborers worldwide by 78 million over the last two decades.
In her statement Monday, Chavez-DeRemer said, “While my time serving in the Administration comes to a conclusion, it doesn’t mean I will stop fighting for American workers.”
The Labor Department has a broad mandate as it relates to the U.S. workforce, including reporting the U.S. unemployment rate, regulating workplace health and safety standards, investigating minimum wage, child labor and overtime pay disputes, and applying laws on union organizing and unlawful terminations.
___
Associated Press writers Steven Sloan and Will Weissert in Washington and Cathy Bussewitz in New York contributed to this report.
The Dictatorship
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The Dictatorship
GOP’s Mills faces expulsion effort launched by one of his Republican colleagues
Republican Rep. Cory Mills of Florida was already dealing with multiple, overlapping scandals when a judge issued a restraining order against the congressman last fall after one of his ex-girlfriends accused him of threatening and harassing her. Soon after, Mills found that even some of his allies were keeping him at arm’s length.
In December, Rep. Byron Donalds, a fellow Florida Republican, conceded“The allegations against Cory, to me, are very troubling. I’m concerned about him. I hope he gets his stuff worked out and cleaned up, but it has to go through ethics [the Ethics Committee]. And he has to, you know, basically do that hard work to clear his name, if it can be cleared.”
Donalds, a leading gubernatorial candidate in Florida, had previously suggested he saw Mills as a possible running mate, making the comments that much more potent.
It didn’t do Mills any favors when The Washington Post published a new report a few days ago highlighting body camera footage that showed police officers in Washington, D.C., who were prepared to arrest the GOP congressman after a woman accused him of assault last year, before a lieutenant ultimately ordered them not to when she changed her account. (Mills refused to comment, except to say that the woman’s initial claim was “patently false.”)
Two days after the Post’s report reached the public, one of Mills’ Republican colleagues announced an effort to kick the congressman out of office. NBC News reported:
Rep. Nancy Mace, R-S.C., introduced a resolution Monday to expel Rep. Cory Mills, R-Fla., from Congress over accusations that include sexual misconduct.
Mills is being investigated by the House Ethics Committee in connection with allegations of ‘sexual misconduct and/or dating violence’ and campaign finance violations. He has denied any wrongdoing.
“The swamp has protected Cory Mills for far too long and we are done letting it slide,” Mace said in a statement. “We tried to censure him and strip him from his committee assignments. Both parties blocked it, but we are not backing down.”
By way of social media, the Floridian expressed confidence that he’d prevail if Mace’s resolution reached the floor, encouraging the South Carolinian to “call the vote forward.”
Time will tell whether the expulsion vote actually happens, but in the meantime, after NOTUS reported that Mills intends to respond with an expulsion resolution of his own targeting Mace, the congresswoman wrote online“Cory Mills lied about his military service, has been accused of beating women, has a restraining order against him, and has allegedly been stuffing his own pockets with federal contracts while sitting in Congress. As a survivor, I will always stand up and right the wrongs of others. He is only coming after me because he knows he’s next.”
It’s not often that Americans see members of Congress launch dueling efforts to kick each other out of office, but this is proving to be an unusually awful term.
Indeed, amid growing GOP anxieties about the upcoming midterm elections, there’s fresh evidence that the House Republican conference is both divided and unraveling.
Steve Benen is a producer for “The Rachel Maddow Show,” the editor of MaddowBlog and an MS NOW political contributor. He’s also the bestselling author of “Ministry of Truth: Democracy, Reality, and the Republicans’ War on the Recent Past.”
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