Unpacking Economic Concerns: Trump’s Bold Executive Move on Inflation Relief

"Inflation" text over torn hundred-dollar bill.

President Trump signs executive order to combat inflation, but economists doubt its effectiveness.

Quick Takes

  • Trump declares “national energy emergency” to expand oil and gas production
  • Executive order aims to reduce housing costs and expand housing supply
  • Skepticism from economists about the order’s ability to address root causes of inflation
  • Order focuses on reducing regulations and increasing energy production
  • Public opinion divided on whether Trump’s measures will effectively lower prices

Trump’s Executive Action on Inflation

President Donald Trump has taken decisive action to address the rising cost of living in America by signing an executive order aimed at delivering emergency price relief. The order directs federal departments and agencies to implement strategies to combat inflation, focusing on key areas such as housing, healthcare, and energy production. This move comes as a response to what the administration views as an inflation crisis caused by increased government spending and regulatory burdens under the previous administration.

The executive order outlines several actions to be pursued, including lowering housing costs, reducing healthcare expenses, eliminating costly appliance requirements, creating employment opportunities, and removing climate policies that raise food and fuel costs. Trump has also declared a “national energy emergency” and signed an order to expand U.S. oil and gas production, emphasizing the importance of energy prices in the overall economic picture.

Housing and Energy: Key Focus Areas

A significant aspect of the executive order is its focus on reducing housing costs and expanding the housing supply. The administration claims that regulatory requirements account for 25% of the cost of constructing a new home. By targeting these regulations, Trump aims to make housing more affordable for American families. Carl Harris of the National Association of Homebuilders (NAHB) praised the order for prioritizing housing affordability.

“President Trump understands that America is facing a housing affordability crisis and the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing,” said Harris.

In the energy sector, Trump has signed an order to increase Alaskan oil production for export, particularly to the Asia Pacific region. The national average cost for a gallon of regular unleaded gasoline is $3.125, down from a high of $5.016 in June 2022. The administration believes that by boosting domestic energy production, it can further reduce energy costs and stimulate economic growth.

Skepticism and Challenges

Despite the administration’s confidence in these measures, economists and policy experts have expressed skepticism about the order’s potential effectiveness. Critics argue that the directive may fall short of its goals given the complexity of existing economic conditions and supply chain inadequacies that continue to challenge inflation stabilization.

“Trump’s cost of living order fails to address the root causes of inflation, namely corporate profiteering and broken supply chains,” said Lindsay Owens, executive director of the Groundwork Collaborative, a progressive economic think tank. “This order is a talking point, not a plan.”

While inflation has decreased since its peak in June 2022, it remains above the Federal Reserve’s 2% target. The order’s lack of specific details on implementation has led some to view it more as a statement of priorities rather than a concrete plan of action. Marc Goldwein from the Committee for a Responsible Federal Budget noted that the order is a starting point, with more detailed plans expected in the future.

As the administration moves forward with its anti-inflation strategy, the effectiveness of these measures will be closely watched by both supporters and critics alike. The coming months will reveal whether President Trump’s executive action can deliver the promised relief to American families grappling with the high cost of living.