Trump vows to make US affordable again, as Americans feel the pinch

Despite promises from the Trump administration, consumers still question the affordability of daily life. On paper, inflation has slowed, wages are rising faster than prices, and rent increases have moderated in comparison to peak times in 2020. These shifts suggest that purchasing power is returning to the American people.

Although these increases are positive, American consumers still feel that their income is being tightened by high cost in food, healthcare, and childcare. Housing prices are high, especially in major cities and interest rates, although being cut, still affect the true affordability of homes. Analysts suggest that progress in data is clashing with structural challenges in the U.S. economy.

https://www.bbc.com/news/articles/ckgl63lrpkmo

The Fed Pauses Rates

A major recent economic event was the Federal Reserve’s choice to hold interest rates steady after raising them repeatedly over the past two years. This move signals that inflation is finally cooling, but the Fed isn’t confident enough yet to start cutting rates.Inflation has slowed, especially in energy and goods, but core prices are still slightly above the Fed’s 2% goal. By pausing, the Fed is trying to support the economy without risking a rebound in inflation.

The decision immediately affected markets: mortgage rates leveled off, the stock market reacted positively, and businesses gained a clearer sense of short-term financial conditions. Still, borrowing costs remain high, meaning investment and hiring may stay slower for now.

Overall, the Fed’s pause shows an economy that’s stabilizing but not fully out of the woods. The next few months will reveal whether inflation continues to fall or if more action is needed. 

https://www.federalreserve.gov/monetarypolicy/monetary20250730a.htm?utm_source=chatgpt.com

Bessent says U.S. will finish the year with 3% GDP growth, sees ‘very strong’ holiday season

        Treasury Secretary Scott Bessent said that it has been a very strong holiday season for the economy and predicted that the US would end the year at 3% real GDP. Recent GDP figured show a contracting 0.6% in the first quarter of 2025, followed by a 3.8% growth in second quarter, and now the Atlanta fed estimates the third-quarter at 3.5%. With these numbers being said consumers, who's spending accounts for 70% of the US. GDP remain worried about the state of the economy. According to The University of Michigan's consumer sentiment survey came at 53.3 in December which is up 4.5% from November but down 28% from last year which causes reason for concern. 

        With people continuing being concerned over these rising price concerns, President Trump has pushed back on the idea that America are struggling financially. Bessent followed Trump by stating the administration was dealing with inflation issues leftover from the Biden administration. With that being said, it is hard to ignore that many of middle-class households feel the disconnect between reported growth and the financial strain. With Bessent stating "The American people don't know how good they have it" could cause a disconnect from the administration and the American people.

https://www.cnbc.com/2025/12/07/bessent-gdp-growth.html