Trump's Inflation Strategy: What to Expect for Energy, Housing, Labor, and Costs

• Author: Jean Bergnaum II
• Posted: 2025-01-24

Inflation remains a top concern for Americans, and President Donald Trump has prioritized lowering costs during his return to the White House.

On his first day, Trump directed federal agencies to review ways to reduce prices for essentials like energy, housing, food, and health care.

Here’s how his administration may approach this challenge.

 

1. Energy Costs

   Trump plans to boost oil and gas production by opening more federal land for drilling, including the Arctic National Wildlife Refuge.
   
   He believes increased domestic energy production will drive down gas prices.
   
   Read: $9 Million in Energy Assistance Available for 25 NC Counties

   However, experts note that U.S. oil production is already at record levels, and global markets ultimately determine prices.
   
   Gas prices are projected to average around $3.20 per gallon in 2025, slightly lower than previous years.
    

2. Housing Costs

   Housing has been a major driver of inflation, with home prices rising 18.4% and rents up 24% since 2021.
   
   Trump’s strategy includes reducing federal environmental regulations that delay construction, such as those tied to the Clean Water Act.

   Congress may also expand tax credits to encourage affordable housing development.
   
   However, tariffs on imported materials and potential labor shortages could offset these efforts.
   
   Worth reading: Higher FHA Loan Limits in 2025: Could This Be Your Year to Buy a Home?

3. Labor Market

   To address labor shortages, the administration may ease regulations and expand worker training programs.
   
   Trump could also impose stricter work requirements for Medicaid and food stamp recipients to boost workforce participation, potentially slowing wage growth.
    

4. Supply Chains

   Supply chain disruptions still contribute to higher costs.
   
   Trump’s administration could work to address the truck driver shortage by loosening age restrictions for interstate trucking with proper training and safety measures.
    

5. Health Care

   Trump has vowed to tackle inefficiencies in the healthcare system that inflate costs.
   
   However, he has already rescinded a Biden-era order aimed at lowering prescription drug prices, which could have helped Medicare and Medicaid beneficiaries save money.
    

6. Government Spending and Deficits

   Trump has created a new department to cut $1 trillion from the federal budget, aiming to reduce government demand and inflationary pressure.
   
   Yet, his plans to extend tax cuts could increase deficits by $5 trillion over 10 years, which may add to inflation in the long run.

 

The Bottom Line

Trump’s inflation plan focuses on energy production, deregulation, and cutting government spending.

While these measures aim to lower costs, experts caution that some policies, like tariffs and tax cuts, may drive inflation higher.

Americans should stay informed about how these changes might impact prices in the months ahead.

Inflation has eased from its 2022 peak, but Trump’s policies will determine whether this trend continues.

Previous article: How Inflation Affects Retirement Savings (And How to Stay Prepared)

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