Beyond pathetic...<Trump and Treasury Secretary Bessent are talking nonsense on inflation
Provided by Dow Jones Nov 19, 2025, 1:51:00 PM
By Brett Arends
No, prices aren't lower. And inflation isn't slowing - at least not yet.
Treasury Secretary Scott Bessent says inflation is falling, but somebody forgot to tell that to the actual numbers.
Treasury Secretary Scott Bessent popped up on the Maria Bartiromo program on Fox Business on Sunday, and then with Bret Baier on Fox News on Tuesday night. And both times he came supposedly bearing good news about inflation.
"We inherited this terrible inflation. We are flattening it out. I believe we are going to push it down," he told Bartiromo. "I would expect in the first two quarters [of the next year] we are going to see the inflation curve bend down."
To Baier he said: "My prediction is that, first quarter, second quarter, what we are going to see, we have brought this inflation down, it is curving down." From the context, and following his comments to Bartiromo, I assume he means that next year they will have brought inflation down, not that they have already brought it down or that it is already "curving down."
At least Bessent was more circumspect than his boss, who said on Saturday that "prices are coming down very substantially on grocery and things," and that "they're already at a much lower level than they were with the last administration." Presumably President Donald Trump meant that he thought the inflation rate was coming down - in other words, that prices are still rising, but more slowly. Because by no measure are prices themselves lower. Groceries rose 2.2% through the first nine months of this year, and at an annualized rate of just over 3%.
Gasoline averages $2.94 a gallon right now.
The price on Dec. 31, 2024? Er ... $2.91.
How is $2.94 a lot less than $2.91? New math?
Inflation is a major, major concern for retirees. Inflation erodes the purchasing power of a fixed income. It cuts the value of bonds as well as stocks. And if you are drawing Social Security and you benefit each year from the annual cost-of-living adjustment, that, too, is a mixed blessing. That is paid only in arrears, which means they start compensating you in 2026 for the rise in prices between 2024 and 2025.
The big jump in inflation in 2021-22 was painful for everyone, but especially for those on fixed incomes.
So if the Treasury secretary was actually bearing good news on inflation, this would be excellent.
Sadly, though, while Bessent seems to think inflation is coming down, or is about to come down, somebody forgot to tell that to the data.
The official consumer-price index rose 0.31% between August and September, for an annual rate of 3.79%. It rose 0.38% between July and August, for an annual rate of 4.79%. By contrast, the annualized rate earlier in the year was fluctuating between 2.68% and minus 0.6% (yes, really).
To put it another way, over the last three months, prices rose at an annualized rate of 3.62%. In the three months to May it was 1%.
Thanks to the government shutdown, we don't have official data for October. But the Federal Reserve Bank of Cleveland keeps a gimlet eye on inflation data, and it has some estimates. Its Inflation Nowcasting tool, which aims to track consumer prices in nearly real time, says inflation is speeding up this month, after slowing during October. (That may be due to the shutdown.) The most recent annualized rate is 3.91%, it says.
Companies are telling the Cleveland Fed that they expect inflation to average 3.3% over the next 12 months. At the start of the year they were expecting ... 3.2%.
The Treasury bond market's inflation forecast for the next five years, which is derived by comparing the interest rates on regular and inflation-protected Treasury bonds, is about 2.4%. That's slightly lower than it was last winter, but higher than it was in the spring.
The limited good news is that the interest rate on 10-year Treasury bonds, a key indicator in the economy and one that is highly sensitive to inflation worries, has tumbled this year, from 4.58% to 4.13%.
But a critical factor in that has been the Fed's determination to hold short-term rates higher for longer, to try to squeeze inflation out of the system and reassure the markets that the central bank will remain vigilant. Long-term rates are lower now than they were before the Fed cut short-term rates in September. It's possible they would be even lower if the Fed had bowed to Trump's pressure and cut short-term rates even more, but I don't know a single person who thinks so.
Bottom line: Members of the administration can go on TV all they like and claim that the inflation rate is coming down, or even that prices themselves have fallen. But until we see that reflected in actual prices, or even in the bond market, hold the Champagne.
-Brett Arends
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11-19-25 1351ET
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