At 8:30 a.m. Friday morning, President Donald Trump’s best chance at good economic news before the midterm elections went poof.
The Bureau of Labor Statistics reported that the consumer price index rose in August by 0.4% and 3.4% over the past year. The “core CPI” (the less volatile measure that removes food and energy prices) rose 0.3% for the month and 2.4% annually. For the fifth month in a row, inflation-adjusted wages fell on a yearly basis.
Were this September 2025, the BLS’ report would be disappointing for the White House but hardly catastrophic. Inflation isn’t accelerating, and it remains well below its peak back in 2022. There were even bright spots in some areas: Grocery prices were flat for the second straight month, for instance.
Trump and his party are stuck with the same argument that failed Democrats in 2024: a plea for patience.
But this is September 2026, and the president and his party are out of time.
This week, the Federal Reserve Board will vote on whether to raise interest rates for the first time since 2023. Trump, who fell out with previous Chairman Jerome Powell over the Fed’s independence, has put enormous pressure on new Fed Chairman Kevin Warsh to lower the rates. The president even threatened to stop trade with countries that have a surplus with the United States if the Fed doesn’t cut rates.
But Warsh has suggested he will disappoint the president.
“Inflation is running above our 2% target,” he said in a speech in Jackson Hole last month. “So the Fed’s predominant focus right now should be on prices.”
As of Friday afternoon, investors put the odds of a rate increase at over 85%. As CNBC’s Matt Peterson wrote, “[Warsh’s] choice now is whether to raise interest rates, or look like he isn’t in control of the central bank he leads.”
A rate increase not only means upward pressure on rates for mortgages, credit cards, car loans and other expenses many voters have; it is also a definitive sign (if another were needed) that Trump’s promise to bring down prices “on Day One” have failed.
For over a year and a half, the White House and its GOP allies have blamed the Biden administration for economic troubles and assured voters that things are getting better.
For instance, consider the $5,000 “dividend” Trump promised this week if Republicans win the midterms. Others at MS NOW have already noted how this stunt is likely illegal on its face, would need congressional approval even if it is legal and mirrors other Trump promises that were never kept.
But there’s also an irony here: These checks may not even cover the pain Trump has brought to people’s pocketbooks.
As my colleague Zeeshan Aleem wrote, “Trump has not only failed to address the cost-of-living crisis with actual solutions, but he’s also systematically made it worse.” Brown University’s Climate Solutions Lab estimated that just at the gas station, the Iran war has cost U.S. households roughly $800 in seven months. And the war has been intensifying again in recent. The Tax Foundation estimated that by the end of 2026, Trump’s tariffs and trade wars will have cost Americans about $1,800 each. Add in higher interest rates and more tax dollars needed to pay for the billions in new military spending and higher debt service costs. Totaled up, as the American Prospect’s Ryan Cooper pointed out, and Trump’s second term “is virtually guaranteed to have cost the average American more than $5,000.”
Even Trump’s promised timing for the checks — after the midterms — is an admission that he and his party are stuck with the same argument that failed Democrats in 2024: a plea for patience. For over a year and a half, the White House and its GOP allies have blamed the Biden administration for economic troubles and assured voters that things are getting better. At times, Trump has even claimed a new golden age is already here.
This month’s inflation report confirms that the GOP’s version of “stick with us” is even harder than it was for Joe Biden in 2022 and later Kamala Harris in 2024. Whereas Democrats could at least say the rate of inflation declined significantly over the latter two years of Biden’s term, that rate has plateaued under Trump — and wages are once again trailing inflation. And to an unusual extent, the president’s actions, most visibly the war with Iran, are to blame, as his polling on the economy shows.
The quickest path to a surprisingly strong midterm for the GOP was through a sharp economic revival. That path is now closed.
James Downie is an opinion editor for MS NOW Daily.
