Trump Runs Out of Options to Fix Inflation Before Midterm Elections

The Trump administration has few options to alleviate economic woes and inflation before the midterm elections, experts say.

This is due in part because the administration has shown little interest in using available tools, such as issuing rebate checks or releasing strategic oil reserves, which would be costly in the long run.

The Federal Reserve recently declined to increase interest rates, despite being a key tool for reducing inflation. The Fed's decision was influenced by President Trump's pressure to lower rates, which can lower borrowing costs but increase inflation.

Economists point out that some factors driving up costs are virtually impossible to resolve in the near term, such as damage to oil refining capabilities in the Middle East due to the war in Iran. Others are already baked into pricing, including tariffs and fuel costs, which will impact groceries and other basic necessities.

The economy is growing at a sluggish 1.5% pace from April through June, with consumer spending and inflation slowing down. However, this has not meant lower costs for Americans, as average gas prices have climbed back above $4 a gallon and the price of Brent crude oil rose to $90 a barrel.

Experts warn that even if Trump's war with Iran were to end, it would take time for gas prices to come down. The administration has no good options for bringing down prices by November, as reducing tariffs takes time to filter down to shelf prices and the Fed may not raise rates in September, which could do 'nothing' ahead of November.