Trump Says There Is ‘Virtually No Inflation.’ Here’s What You Need to Know

• In a social media post on Monday, President Donald Trump criticized the Federal Reserve for not cutting interest rates, saying there is “virtually no inflation.”

• The most recent report on consumer inflation showed that inflation has slowed, but is still above the Federal Reserve’s goal of 2% annually.

• Central bankers are content to hold their interest rate at an elevated level while they wait and see what effects tariffs have on the economy.

In his latest criticism of the Federal Reserve, President Donald Trump said there is “virtually no inflation,” but central bankers could beg to differ.

In a post on the social media platform Truth Social Monday morning, the president argued that the Federal Reserve should cut interest rates because consumer costs are trending “so nicely downward.” While price increases have slowed in recent months, inflation is still above where the Federal Reserve would like it to be to make cuts to its influential federal funds rate.

Here’s what you need to know about inflation and interest rates right now.

In the most recent report on consumer prices, overall inflation was up 2.4% over the same time last year, still above the Federal Reserve’s annual goal of 2%.

Trump also said food prices have “substantially lowered” and energy costs were “way down.”

Energy prices fell by 3.3% in March from last year. However, not all energy was cheaper. The cost of gasoline fell significantly and outweighed electricity and natural gas increases. Food prices grew 3.0% from the same time last year.

Food and energy prices can fluctuate from month to month for reasons that have little to do with broader inflation trends. For that reason, economists and Fed officials often pay special attention to “core” inflation measures, which exclude prices for food and energy. That number rose 2.8% over the last 12 months, the smallest increase since March 2021.

The Federal Reserve uses its influential federal funds rate to help curb inflation, which is defined as a broad rise in prices for goods and services over time.

When the fed funds rate is higher, borrowing, including on credit cards and through loans, is more expensive. That often decreases consumers’ and businesses’ spending, which, in turn, should help moderate the rate of price increases.

The Fed has set its annual inflation goal at 2% because of the dual mandate Congress gave the central bank: keep inflation low and employment high. To balance those two things, the Fed has to find a place where its key interest rate is high enough to keep inflation from flaring, but low enough that it doesn’t constrict hiring.