Happy New Year 2025

Tag: inflation

January inflation gives Fed more reason to hold on interest rate cuts

Egg prices soared by more than 15% in January. (iStock)

Annual inflation increased to 3% in January, rising above expectations and giving the Federal Reserve further reason to slow down interest rate cuts.

Inflation increased 0.5% monthly, slightly exceeding expectations and above the previous month’s increase of 0.4%, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS). Core CPI, which excludes food and energy, rose by 0.4% in January, coming in at the same level as December’s increase. This brought the year-over-year rate to 3.3%.

Shelter costs rose 0.4% and were the most significant contributor to the monthly increase in January, accounting for nearly 30% of the monthly increase in all items. Gas was up 1.8% over the month. Food prices continued to rise, increasing 0.4% last month. The food at home index rose 0.5%, driven primarily by the soaring costs of eggs, which increased 15.2% in January.

“The unexpected acceleration in inflation marks the third consecutive monthly uptick in the consumer price index and extends a reflationary trend since two consecutive flat months for the index in May and June 2024,” Jim Baird, Plante Moran Financial Advisors’ chief investment officer, said in a statement. “Against a backdrop of solid demand, inflation has accelerated. It’s a reality that may spook consumers who remember the Covid-19 era price spike all too well.

“It will also make President Trump’s proposed import tariffs a tougher sell than was the case during his first term, when both inflation and interest rates were exceptionally low,” Baird continued.

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SENIORS TO GET MODERATE COST OF LIVING BUMP IN SOCIAL SECURITY PAYMENTS NEXT YEAR

The Fed pauses on further rate cuts

The increase in inflation, combined with a stable jobs market and economic growth, has given the Federal Reserve more room to work.

The Federal Reserve held interest rates at 4.5% to 4.75% in January, prompted by strong economic indicators that gave the central bank more room to wait. Federal Reserve Chair Jerome Powell said that the central bank intend to remain cautious about additional rate cuts so long as the job market remains solid and prices continue to climb.

“The murkiness of evolving trade policy creates a significant unknown for Fed policymakers who will have to grapple with the potential conflicting policy challenges of slower real growth and higher inflation,” Baird said. “While even bearish forecasts are a far cry from the stagflationary environment of the 1970s, the playbook would seemingly still apply.

“Arresting inflation is likely to remain the priority for the Fed, even at the expense of near-term growth,” Baird said. “The fear of inflation expectations becoming unanchored is just too much for policymakers to ignore.”

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FHFA ANNOUNCES HIGHER MORTGAGE LOAN LIMITS FOR 2025

How higher for longer impacts your wallet

All signs point to the Fed holding interest rates higher for longer, which means consumers will continue to be impacted by stubbornly elevated interest rates impacting a range of credit products, including credit cards, mortgages, unsecured personal loans and auto loans, according to Charlie Wise, TransUnion’s senior vice president of research and consulting.

“Consumers should avoid building and carrying large credit card balances, particularly in light of very high interest rates on this type of debt, and whenever possible pay more than the monthly minimums due on their cards,” Wise said in a statement.

Additionally, Wise advised that consumers keep a close watch on their credit profiles and keep them in the best shape possible so that when rates finally drop to a more manageable level, they are ready to refinance their existing debts into more affordable loans.

Using a personal loan to pay off high-interest debt at a lower rate could help you reduce your expenses and put money back in your wallet. You can visit Credible to find your personalized interest rate today.

BIDEN CANCELS MORE STUDENT LOANS WITH ONE WEEK LEFT TO HIS TERM

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

February 13, 2025
Wholesale inflation rises 3.5% in January

Payne Capital Management president Ryan Payne joins ‘Varney & Co’ with his take on the markets.

U.S. producer prices increased solidly in January, offering more evidence inflation was picking up again and strengthening financial market views that the Federal Reserve would not be cutting interest rates before the second half of the year.

The producer price index for final demand rose 0.4% last month after an upwardly revised 0.5% gain in December, the Labor Department’s Bureau of Labor Statistics (BLS) said on Thursday. Economists polled by Reuters had forecast the PPI rising 0.3%. In the 12 months through January, the PPI advanced 3.5% after increasing 3.3% in December.

The report followed news on Wednesday that consumer prices accelerated by the most in nearly 1-1/2 years in January, dimming hopes that the U.S. central bank would resume cutting rates in June. Financial markets now expect a rate reduction in September, though some economists believe the window for further policy easing has closed, citing strong domestic demand and a stable labor market.

Fed Chair Jerome Powell told lawmakers on Wednesday “we are close but not there on inflation,” adding “we want to keep policy restrictive for now.”

The Fed left its benchmark overnight interest rate unchanged in the 4.25%-4.50% range in January, having reduced it by 100 basis points since September, when it launched its policy easing cycle. The policy rate was hiked by 5.25 percentage points in 2022 and 2023 to tame inflation.

President Donald Trump’s fiscal, trade and immigration policies are seen fanning inflation. A 25% tariff on goods from Canada and Mexico was suspended until March. But a 10% additional tariff on Chinese goods went into effect this month.

With January’s PPI report, the BLS updated weights to reflect price movements in 2024, and seasonal adjustment factors, the model that the government uses to iron out seasonal fluctuations from the data.

February 13, 2025
Tariffs could factor into Fed’s rate-cut plans amid inflation concerns, experts say

Charles Schwab & Co. chief investment strategist Liz Ann Sonders analyzes the January CPI report on ‘Making Money.’

A hotter-than-expected inflation report from January and uncertainty over the impact of President Donald Trump’s tariff plans on consumer prices could factor into the Federal Reserve’s rate-cut decision, expert economists said.

The Labor Department on Wednesday released the consumer price index (CPI) for January, which showed that inflation was 3% on an annual basis, up from 2.9% a month ago, after a larger than anticipated 0.5% monthly increase.

The uptick in inflation comes after the Fed opted against a fourth consecutive interest rate cut at its meeting last month. Uncertainty surrounding Trump’s plans for tariffs, which are taxes on imported products, and their implementation timelines could lead to a longer wait for more rate cuts than anticipated.

“Today’s data reaffirms Powell’s decision to put rate cuts on the back burner for an extended period of time,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “Overall, today’s inflation data should force market participants to re-think the Fed’s ability to cut rates this year, especially considering the rise in prices is likely unrelated to any tariff activity from the White House.”

INFLATION RISES 3% IN JANUARY, HOTTER THAN EXPECTED

Bill Adams, chief economist of Comerica Bank, said that the hot inflation pressure serves as “confirmation that price pressures continue to bubble beneath the economy’s surface” and will “reinforce the Fed’s inclination to at least slow and possibly even end rate cuts in 2025.”

“The Fed is also watching the impact of higher tariffs, more restrictive immigration policies and tax cut plans,” Adams added. “These policies could all add to inflation as their effects ripple through the economy, causing the Fed to keep interest rates higher than they would have been under the status quo.”

TRUMP CALLS FOR LOWER INTEREST RATES TO GO ‘HAND-IN-HAND’ WITH TARIFFS: ‘LETS ROCK AND ROLL, AMERICA’

Federal Reserve Chair Jerome Powell said the Fed is waiting to see how tariff policies are implemented before accounting for any inflationary impact. (Mandel Ngan/AFP via Getty Images / Getty Images)

Seema Shah, chief global strategist for Principal Asset Management, said the inflation report “will make for very uncomfortable reading for the Fed” given the price growth and noted that the “government’s policy agenda threatens to raise inflation expectations” — a dynamic that could lead to inflation risks becoming “too heavily weighted to the upside to permit the Fed to cut rates at all this year.”

EY chief economist Gregory Daco said that his firm’s view is that the Fed “will maintain a wait-and-see approach over the coming months” and that he currently sees only two Fed rate cuts in June and December. “The risk is tilted toward less easing if the administration’s policy mix fuels inflation and inflation expectations,” Daco explained.

TRUMP BLASTS FED FOR NOT CUTTING INTEREST RATES

President Donald Trump has imposed new tariffs on China and has threatened tariffs on Canada and Mexico, as well as reciprocal tariffs on other trading partners. (Jabin Botsford/The Washington Post via Getty Images / Getty Images)

Ryan Sweet, chief U.S. economist at Oxford Economics, noted that the additional tariffs on China and other threatened tariffs have “yet to make their way into the inflation data.”

“The Fed’s response to tariffs isn’t straightforward, but we don’t believe tighter monetary policy is likely as it would magnify the drag on the economy from tariffs,” Sweet said. “The Fed needs time to gauge how the tariffs are affecting both sides of its dual mandate, keeping it paralyzed until December, when we think its attention will shift from inflation to its full employment mandate, leading to aggressive easing in 2026.”

“The monetary policy implications are clear but it’s unclear whether the January CPI will give some in the Trump administration pause about moving forward quickly with some of the proposed tariffs. Tariffs can still be used as a bargaining tool to get some concessions from other countries, but the political optics of putting even a little upward pressure on consumer prices via tariffs wouldn’t be great for the Trump administration,” he explained.

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Federal Reserve Chair Jerome Powell testified before the House Financial Services Committee on Wednesday and was asked about the impact of tariffs on Americans’ cost of living and the central bank’s efforts to tame inflation, and the chairman noted that the Fed doesn’t comment on policy decisions it doesn’t have discretion over.

“The Fed has no role in setting tariffs and, you know, we don’t comment on decisions made by those who do have that authority,” Powell said. “We try to stick to our own knitting. In this particular case, it’s possible that the economy would evolve in ways that because of tariffs, or partly because of tariffs, that we would need to do something with our policy rate. But we can’t know what that is until we actually know what policies are enacted.”

February 13, 2025
Inflation rises 3% in January, hotter than expected

Barrons Roundtable unpacks the impact of President Donald Trumps tariff plans.

Inflation ticked higher in January as stubbornly high prices continued to strain Americans’ household finances as the Federal Reserve weighs a continued pause to its interest rate cut plans.

The Labor Department on Wednesday said that the consumer price index – a broad measure of how much everyday goods like gasoline, groceries and rent cost – increased 0.5% in January while it rose to 3% on an annual basis.

Both the annual and headline CPI figures were hotter than the estimates of economists polled by LSEG.

This is a developing story. Please check back for updates.

February 12, 2025
Don’t be fooled. Trumponomics will tame inflation — not make it worse

Economist Steve Moore and former member of White House Council of Economic advisors Tomas Philipson discuss President Donald Trump’s tariffs on foreign countries on ‘The Bottom Line.’

It seems the whole world and the entire liberal media are hyperventilating over the Trump tariffs and their inflationary impact. Many of the sharpest critics of President Donald Trump’s policies are the same “experts” who assured us four years ago that President Joe Biden’s policies wouldn’t cause inflation. Oops!

Then there is the argument put forth by the New York Times and many economists like Mark Zandi of Moody’s that Trump’s tariffs are inflationary and so are his tax cuts.

Hello! Tax cuts and tax increases both can’t cause inflation. This is political advocacy dressed up as (bad) economics.

Inflation is a government-generated disease induced by fiscal and monetary policy that leads to too many dollars chasing too few goods. Anything that increases money puts pressure on consumer prices and anything that increases the supply of goods produced reduces inflationary pressures.

HERE’S HOW TRUMP’S TARIFFS ON CHINA COULD IMPACT DRUG PRICING AND OTHER HEALTHCARE COSTS

As economists who believe in free markets, we aren’t fans of higher taxes in general, including tariffs, and it is true they may raise prices slightly for certain products. But there are three problems with the argument that Trump’s tariffs will cause an overall rise in prices.

Economist Steve Moore and former member of White House Council of Economic advisors Tomas Philipson discuss President Donald Trump’s tariffs on foreign countries on ‘The Bottom Line.’

The first is, of course, that they are not implemented and merely used as effective threats to yield concessions. This “peace through strength” in trade wars rather than regular wars mimics our influential but unused nuclear capabilities. Indeed, Colombia caved while Mexico and Canada are now pledging to assist in keeping deadly drugs from coming across the border.

The second flaw in the “tariffs cause inflation” line is that U.S. economic activity is mostly domestic and thus the quantitative impact of tariffs is relatively small. Imports now make up about 12% relative to our GDP. Much-debated Chinese imports represent only 2%, so a 10% increase in tariffs, even if fully pushed onto U.S. consumers, represents a 0.2 percent change. This is one reason why the Trump tariffs did not cause inflation in the first Trump term. But the effect on prices is likely to be a lot less than that this time around because some of the burden of the tariff is borne by foreign producers. If you sell a close substitute to U.S. goods, many consumers will say goodbye if you raise prices in response to a tariff.

Policies that make the American economy more productive are the best antidote to inflation.

Similarly, Trump’s promised deportation of illegal aliens may raise prices by causing a shortage of workers and thus higher prices in some immigrant-dependent industries. But let us say that 2 million workers were deported — which we think would be a high number. In a country with a labor force of 168 million, this wage-push inflation is likely to be small. In addition, if wages rise, the effect on real wages for U.S. workers from price hikes is reduced.

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But here is what the inflation hawks are missing. Any pressure on prices from deportations and tariffs are likely to be more than offset by other Trump economic policies that will put downward pressures on overall inflation. Policies that make the American economy more productive are the best antidote to inflation.

O’Leary Ventures Chairman Kevin O’Leary shares whether he’s concerned about President Donald Trump’s tariffs on steel and aluminum, the fate of the U.S. penny and the handling of the TikTok sale.

Trump is suggesting slashing income tax rates to 15% on made-in-America products. DOGE cost cutting and caps on federal hiring will make government products and services less expensive. And perhaps most importantly, reducing onerous regulations will cut costs and prices.

CLICK HERE TO READ MORE ON FOX BUSINESS

More drilling and mining will make energy and minerals less expensive. Trump’s push for health care price transparency will make medical consumers more attentive to costs and put downward on prices. Trump’s call for legal immigrant worker visas will offset losses of illegal alien workers.

Those who warn of runaway inflation under Trump ignore all the Trump policies that are disinflationary. They forget that Trump was already president for four years and the annual inflation rate from many of the same policies he is talking about now was 1.9% or slightly less than the Federal Reserve’s 2% inflation target.

One prediction you can take to the bank: if Trump can win spending cuts from Congress anywhere near what he is proposing, inflation is going to look a lot more like the low levels in his first term than the blizzard of inflation under Bidenomics.

Stephen Moore is a visiting senior fellow at the Heritage Foundation. Tomas Philipson is an economist at the University of Chicago and served as chairman of the Council of Economic Advisers under President Donald Trump. Moore is co-founder and Philipson a visiting research fellow at Unleash Prosperity.

CLICK HERE TO READ MORE FROM STEPHEN MOORE

February 10, 2025
Americans’ Super Bowl spending to rise despite inflation worries

Former NFL player Jake Bequette gives his take on the celebrity culture shift to the right and Sunday’s big game on ‘Varney & Co.’

Americans are getting ready for the Super Bowl to kick off on Sunday, and while spending on festivities related to the big game is up, more fans are wanting to dial it back than wanting to spend more, a new report found.

A study by LendingTree found that 75% of Americans said they’ll tune into the Super Bowl but that of those who plan to watch nearly one-third, or 31%, say they’ll spend less on Super Bowl festivities than last year – well above the 19% who say they’ll spend more. Half of Americans say their spending will be the same as last year.

Americans who do plan to spend on Super Bowl festivities expect to spend $142 on average, an increase of 22% from $116 a year ago. The top items they plan to spend on include food and beverages, as well as fan gear.

“Even though more people are saying they’re going to spend less, the average amount for people who are going to spend was up fairly significantly,” Matt Schulz, chief credit analyst at LendingTree, told FOX Business. “You’re talking about $25 which isn’t going to change most people’s lives, but it’s not nothing either when you’re just talking about getting together to watch a football game with friends.”

FOOD DEALS ABOUND FOR SUPER BOWL: WHAT CHAINS ARE OFFERING

Jalen Hurts (left) of the Philadelphia Eagles and Patrick Mahomes (right) of the Kansas City Chiefs stand on stage next to the Vince Lombardi Trophy during Super Bowl LIX Opening Night at Caesars Superdome on February 3, 2025, in New Orleans, Louisia (Kevin Sabitus/Getty Images / Getty Images)

“It’s a pretty significant divide there and, again, I just think that you can look back and blame so many things on inflation and high prices and high interest rates and all that, and I think this is another one of those cases most likely,” Schulz said.

The report noted that 41% of Super Bowl watchers say they’ll place bets related to the game, including 66% of Gen Zers, 59% of parents with young children, 56% of Millennials and 51% of men. Most plan to place smaller bets, with just 41% planning to wager $100 or more and a similar number reporting they’ll use a credit card to place their bets.

“Certainly, as we’ve seen since the pandemic, sometimes people just like spending more on what they want to spend on in order to kind of make up for how stressful a year it’s been or crazy things have been,” Schulz said.

DURING SUPER BOWL LIX, FANS WILL EAT A STAGGERING AMOUNT OF CHICKEN WINGS

PHILADELPHIA, PENNSYLVANIA – NOVEMBER 03: Saquon Barkley #26 of the Philadelphia Eagles reverse hurdles over Jarrian Jones #22 of the Jacksonville Jaguars in the second quarter at Lincoln Financial Field on November 03, 2024 in Philadelphia, Pennsylv (Elsa/Getty Images / Getty Images)

LendingTree’s findings come as a separate study conducted by the Bank of America Institute showed that Americans’ spending on spectator sports reached an all-time high in 2024.

The Bank of America Market Landscape Insights study found that consumers spend an average of $1,122 on sports annually – a figure that includes everything from attending games to buying athletic equipment.

SUPER BOWL LIX BATTLE: CHIEFS AND EAGLES ARE BOTH VALUED IN THE BILLIONS

Travis Kelce of the Kansas City Chiefs celebrates with Taylor Swift after a 17-10 victory against the Baltimore Ravens in the AFC Championship Game at M&T Bank Stadium on January 28, 2024 in Baltimore, Maryland. (Photo by Patrick Smith/Getty Images / Getty Images)

Bank of America’s report delved into the local economic impact of live sporting events by looking at last year’s Super Bowl LVIII in Las Vegas, which pushed retail spending 8% higher compared to the rest of the month.

Super Bowl LIX will air on FOX this Sunday, Feb. 9, at 6:30pm Eastern. The game is being played in New Orleans, Louisiana.

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The Kansas City Chiefs – led by Patrick Mahomes and Travis Kelce – will look to make history as they pursue a third straight Super Bowl title.

They will face the Philadelphia Eagles, as Jalen Hurts and Saquon Barkley look to bring the Chiefs’ run to an end.

February 8, 2025
Dems claim Trump tariff could ‘drive up’ costs despite deflecting blame from Biden’s inflation

Democratic lawmakers are claiming that President Donald Trump’s impending tax on international goods will raise costs, despite spending years deflecting blame for high prices from the Biden administration.

Trump signed an executive order Saturday night to impose a 25% tariff on imports from Mexico and Canada and a 10% tax on all imports from China, fulfilling a promise he made during his 2024 presidential campaign as a way to circumvent drug trafficking into the U.S.

The tariffs on Canada and China are set to go into effect at midnight, but Trump announced on Monday that he would pause the tariff on Mexico for one month after discussions with President Claudia Sheinbaum. However, as the tariffs loom, Democrats are claiming they could drive up bills for everyday Americans, despite supporting several tax hikes under the Biden administration.

“This is a terrible idea,” Sen. Mark Kelly, D-Ariz., said in a statement. “Folks are already struggling to get ahead because of high prices, and now President Trump is about to drive up grocery and gas prices while raising costs on Arizona businesses.”

TRUMP DEFENDS TARIFFS, ACCUSES CANADA OF BEING ‘VERY ABUSIVE OF THE UNITED STATES’: VIDEO

Sen. Chuck Schumer, D-N.Y., criticized President Donald Trump’s order to tariff Mexico, Canada and China. (J. Scott Applewhite)

Sen. Mark Warner, D-Va., claimed Trump’s tariffs “could cost a typical family $1,200 per year,” while Rep. Jamie Raskin, D-Md., said that “President Trump owns the economic and national security fallout.”

TRUMP’S TARIFFS ON MEXICO, CANADA ARE THE ‘BEGINNING OF A NEGOTIATION,’ SAYS KEVIN O’LEARY

Additionally, Democratic Rep. Greg Stanton of Arizona cosigned a letter with 42 lawmakers calling on Trump to “immediately” rescind the 25% tariffs on Mexico and Canada.

“Trump’s tariffs on Canada will do nothing but hurt American workers and auto manufacturers. He’s giving our overseas competitors a leg up,” Sen. Gary Peters, D-Mich., claimed in a reaction to the impending tax.

Rep. Jamie Raskin, D-Md., said that “President Trump owns the economic and national security fallout.” (Kevin Dietsch)

“It would be nice if Donald Trump could start focusing on getting the prices down instead of making them go up,” wrote Sen. Chuck Schumer, D-N.Y. “I am concerned these new tariffs will further drive up costs for American consumers. We should be focused on going hard against competitors who rig the game, like China, rather than attacking our allies.”

While Democrats are uniting to criticize Trump’s tariffs, members of the party did not widely push back on tax increases implemented by former President Joe Biden.

During his administration, Democrats backed Biden’s proposals for a range of tax increases, including hikes on small businesses, corporations, capital gains and dividends, personal income, energy and a second estate tax.

President Donald Trump said that Canada has been “abusive” toward the U.S. in terms of trade. (Getty Images)

When gas prices doubled under Biden, according to data from the Energy Information Administration, Schumer, then-Senate majority leader, claimed that it was oil companies “gouging us at the pump” who were to blame.

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Despite the backlash, Trump has defended his decision to authorize the tariffs, telling reporters on Sunday night that Canada has been “abusive” toward the U.S. in terms of trade.

Aubrie Spady is a Writer for Fox News Digital.

February 3, 2025
Fed’s favorite Inflation gauge showed price growth picked up in December

QI Research CEO and chief strategist Danielle DiMartino Booth reacts to the Federal Reserve leaving interest rates unchanged on Making Money.

The Federal Reserve’s preferred inflation gauge showed prices rose as expected in December, and it remains above the central bank’s target level amid its ongoing efforts to wrestle down inflation.

The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index was up 0.3% from the prior month and 2.6% on an annual basis. Those figures were in line with the estimates of economists polled by LSEG.

Core PCE, which excludes volatile food and energy prices, rose 0.2% for the month and increased 2.8% from a year ago, in line with estimates.

This is a developing story. Please check back for updates.

January 31, 2025
Federal Reserve holds interest rates steady amid inflation uncertainty

Kudlow panelists John Carney and Brian Brenberg discuss job growth and the Feds moves.

The Federal Reserve on Wednesday announced that it will leave interest rates unchanged amid uncertainty about inflation and economic conditions.

The Fed’s decision leaves the benchmark federal funds rate at a range of 4.25% to 4.5% and follows three consecutive interest rate cuts at the central bank’s most recent meetings – including a 50-basis-point cut in September as well as a pair of 25-basis-point reductions in November and December.

“Recent indicators suggest that economic activity has continued to expand at a solid pace,” wrote members of the Federal Open Market Committee (FOMC), the group responsible for guiding the Fed’s monetary policy. “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”

The FOMC statement said that the Fed continues to pursue its dual mandate of achieving maximum employment and inflation at 2% over the longer run. It added that the “economic outlook is uncertain, and the Committee is attentive to risks to both sides of its dual mandate.”

FOMC members were unanimous in the decision to leave rates unchanged at this time. The committee’s statement added that policymakers “would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals” and that it will consider a range of information including labor market data, inflation pressures and expectations, as well as financial and international developments as it considers its next move.

Fed Chair Jerome Powell will outline the central bank’s decision at a press conference where he will likely face questions about how policymakers view the impact of President Donald Trump’s economic agenda. He may also face questions about whether they considered his call for lower interest rates in their decision.

This is a developing story. Please check back for updates.

January 29, 2025
Howard Lutnick, Trump Commerce secretary pick, says it’s ‘nonsense’ that tariffs cause inflation

President Donald Trump’s nominee to lead the Commerce Department Howard Lutnick told senators the argument that tariffs cause inflation is “nonsense” during a confirmation hearing.

“The two top countries with tariffs, India and China, do have the most tariffs and no inflation,” Lutnick noted.

“A particular product’s price may go up,” he conceded, while arguing that levies would not cause broad inflation. “It is just nonsense to say that tariffs cause inflation. It’s nonsense.”

Lutnick testified before members of the Senate Commerce, Science and Transportation Committee on Wednesday ahead of an impending committee and full Senate floor vote to confirm him to the Cabinet position.

Inflation, which ticked as high as 9.1% in June 2022 under the Biden administration, became a defining issue in the 2024 election as Trump promised to bring household prices back down.

Lutnick also said he prefers “across-the-board” tariffs on a “country-by-country” basis, rather than ones aimed at particular sectors or products.

A VICTORY FOR TRUMP’S ‘FAFO’: HOW THE WHITE HOUSE STRONG-ARMED ONE-TIME CLOSE ALLY COLOMBIA OVER IMMIGRATION

Howard Lutnick, U.S. President Donald Trump’s nominee to be commerce secretary, testifies before a Senate Commerce Committee confirmation hearing on Capitol Hill in Washington, U.S., January 29, 2025. REUTERS/Kevin Lamarque

“I think when you pick one product in Mexico, they’ll pick one product. You know, we pick avocados, they pick white corn, we pick tomatoes, they pick yellow corn. All you’re doing is picking on farmers.”

“Let America make it more fair. We are treated horribly by the global trading environment. They all have higher tariffs, non-tariff trade barriers and subsidies. They treat us poorly. We need to be treated better,” Lutnick went on.

“We can use tariffs to create reciprocity.”

He said Trump, a longtime friend, was of a “like mind” that tariffs need to be simple.

“The steel and aluminum had 560,000 applications for exclusions,” said Lutnick. “It just seems that’s too many.”

Trump recently signed an executive order directing the Commerce Department and the office of the US Trade Representative to conduct a review of U.S. trade policy and tariff models, with a focus on China. Trump has said he intends to impose a 25% tariff on goods from Canada and Mexico on Feb. 1 amid concerns of mass migration and drug trafficking. He also said he would increase tariffs on China by 10%.

Lutnick also sounded off about Europe treating U.S. industry unfairly.

AOC ROASTED OVER POST ABOUT COLOMBIA TARIFFS AND COFFEE PRICES THAT ‘AGED LIKE HOT MILK’

U.S. President-elect Donald Trump delivers remarks next to CEO of Cantor Fitzgerald and Trump’s nominee for Commerce Secretary Howard Lutnick, at Mar-a-Lago in Palm Beach, Florida, U.S., December 16, 2024. REUTERS/Brian Snyder

“I think our farmers and ranchers and fishermen are treated with disrespect overseas,” he said.

“Europe, for example, comes up with all these sort of policies, that our ranchers can’t sell steak. If you if you saw European, steer and an American steer, it’s laughable. The American steers are three times this size. The steaks are so much more beautiful.”

“But they make up this nonsensical set of rules so that our ranchers can’t sell there.”

Lutnick said Chinese tariffs “should be the highest.” “But the fact that we Americans cannot sell an American car in Europe is just wrong. And it needs to be fixed.

Trucks travel across the World Trade International Bridge in Laredo, Texas, U.S., on Monday, June 10, 2019. (Photographer: Callaghan O’Hare/Bloomberg via Getty Images)

“While they’re an ally, they are taking advantage of us and disrespecting us. And I would like that to end.”

His comments echoed those of Trump last week.

“The European Union is very, very bad to us,” he said. “So they’re going to be in for tariffs. It’s the only way … you’re going to get fairness.”

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The governments of Mexico, Canada and nations in Europe have prepared a list of their own U.S. imports that will face tariffs in a tit-for-tat trade war if Trump follows through on taxing their own goods as they’re brought into the U.S.

Kaja Kallas, the European Union’s top diplomat, said Monday that European nations needed to united to use their collective economic force against the U.S. if needed.

“As the United States shifts to a more transactional approach, Europe needs to close ranks,” she said at a news conference in Brussels. “Europe is an economic heavyweight and geopolitical partner.”

January 29, 2025