In June 2021, U.S. inflation reached 5%, with then-Treasury Secretary Janet Yellen describing it as ‘transitory.’ However, inflation surged to 9.1% by mid-2022, the highest in over 40 years, largely due to post-COVID fiscal stimulus and supply chain disruptions. Nearly two years later, inflation retreated to 3%, with Yellen admitting her earlier predictions were incorrect.
On April 2, 2025, President Trump imposed blanket tariffs on trading partners, raising concerns about inflation. Economist Larry Summers warned the tariffs could mirror inflation risks from early 2020s. Contrary to these predictions, the current year-over-year Consumer Price Index (CPI) stands at 2.7%.
Despite ongoing caution from economists, factors like decreasing housing prices, energy industry adjustments, and advancements in AI productivity are expected to keep inflation low in 2026. Alternative inflation measurements, such as Truflation, recently indicated a CPI as low as 0.86%.
