Trump: Costs Are Going Down Rapidly, Blames Biden for Inflation
Trump said costs are going down rapidly, blamed Biden for inherited inflation, and tied further relief to the end of the Iran conflict. Here is what traders should watch.
President Donald Trump said costs are going down rapidly, adding that he inherited what he called the worst inflation in history from Joe Biden. The comments arrive as markets debate whether the disinflation trend is durable enough to justify further Fed rate cuts.
What Trump said
Trump pointed to a recent inflation report and argued that prices were declining, again blaming former President Joe Biden for the rise in costs that preceded his return to the White House.
The president also linked the inflation outlook to the ongoing war involving Iran, saying prices could decline further when the conflict ended, telling reporters they would see a big drop as soon as the war is over.
The data behind the claim
At the beginning of December, the average 30-year fixed mortgage rate was 6.19%, roughly 12% lower than when Trump took office in January, while shelter inflation sits at a four-year low and the national median rent has fallen for four straight months.
The White House also flagged declines in prices for eggs, butter, ice cream, fresh fruit, cereal, fish, seafood, rice, pasta, and ham. Still, headline CPI has run hotter than the administration’s messaging suggests in recent prints, keeping the debate alive.
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Why traders care
Cooler inflation prints support the rate-cut narrative that has powered equities and bonds. If Trump’s framing sticks, expect renewed pressure on the Fed to accelerate easing, which typically benefits duration-sensitive names and rate-sensitive sectors like housing and small caps.
The counter-risk: tariffs and any escalation tied to the Iran situation could reintroduce price pressure, particularly through the energy channel. Watch other news flow on CPI, PPI, and oil.
Options market and stocks to watch
A softer inflation path tends to move a familiar set of tickers. Names on the radar:
SPY — watch for reaction to any follow-on inflation commentary and rate-cut repricing.
TLT — long-duration Treasuries are the cleanest expression of the “costs are cooling” trade.
XLE — energy is the swing factor if Iran tensions ease or escalate.
XHB — homebuilders are already benefiting from lower mortgage rates cited by the White House.
IWM — small caps remain the highest-beta play on a dovish Fed pivot.
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