Trump Policies Fuel Inflation Amid Market Gains

The Trump administration's policies have been linked to rising inflation in the US economy. According to data, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite reached record highs since early June. However, beneath these market gains, several presidential policies have directly affected the inflation rate.

Two key policies have contributed to inflation: tariffs and the Iran war. The administration imposed sweeping global tariffs in April 2025, with duties ranging from 10% to 12.5%. Although most of these tariffs were invalidated by the US Supreme Court in February 2026, they have since been reimposed on over 80 countries.

Jerome Powell, former Fed Chair, and Kevin Warsh, current Fed Chair, have cited Trump's tariffs as a source of elevated prices in the goods sector. The Iran war also contributed to inflation after the president authorized military operations against Iran in February 2026. Iran subsequently closed the Strait of Hormuz to virtually all maritime traffic.

The US economy has seen 64 consecutive months with trailing 12-month inflation exceeding the Federal Reserve's long-term 2% target, with June marking a three-year high for headline inflation.