A Goldilocks first year for Trump 2.0
Are they actually going to vote on something real?
If you want to be a pessimist, the worst economic news for President Donald Trump during his first full year back in the Oval Office is that the Federal Reserve cannot possibly justify slashing the interest rate charged by banks to borrow from each other overnight.
If you want to be an optimist, you just have to look at why the federal funds rate is so static. After all, the Fed left it unchanged at the 3.5%–3.75% target range in its January 2026 meeting. That was in line with expectations, after three consecutive rate cuts last year that pushed borrowing costs to their lowest level since 2022.
Despite perpetual panic over a supposedly deteriorating labor market, a second shoe has yet to drop, with the unemployment rate humming near historic lows at 4.3%. And although net job growth across 2025 was mild — the Committee for a Responsible Federal Budget found the economy added a net 359,000 jobs — that stems from the White House’s intentional crusade to slash 324,000 jobs from the federal government. The Department of Government Efficiency’s moves in early and mid-2025, haphazard and arbitrary at times, brought federal employment to its lowest level in 60 years.
And although those DOGE reforms failed to target the entitlements that drive federal spending, the budget deficit for the first third of the current fiscal year is down 20% from when Trump took office. That’s in large part due to Trump’s deregulatory executive agenda and the supply-side reforms of his signature domestic achievement, the tax-cutting One Big Beautiful Bill Act.
Such deficit reduction is arguably the silent yet primary factor driving inflation’s overdue decline. While inflation remains above its 2% maximum target, consumer price index inflation, which was at 3% by the end of Joe Biden’s presidency, fell to 2.4% in January. And core CPI, which was at 3.3%, has fallen to 2.5%. Core CPI, the preferred inflation measure of the Fed because it excludes the volatile categories of food and energy, is now at its lowest point since Biden lit the economy on fire by signing his cynically named “American Rescue Plan” into law.
The labor market isn’t anywhere near recession territory, nor is it far too hot as it was during the most inflationary period of Bidenomics. And inflation is finally coming down in steady, sure steps, without a corresponding cooling of economic growth. In fact, the reverse is true. Economic growth is running north of 4% while productivity growth is closer to 5%, the …
Are they actually going to vote on something real?
If you want to be a pessimist, the worst economic news for President Donald Trump during his first full year back in the Oval Office is that the Federal Reserve cannot possibly justify slashing the interest rate charged by banks to borrow from each other overnight.
If you want to be an optimist, you just have to look at why the federal funds rate is so static. After all, the Fed left it unchanged at the 3.5%–3.75% target range in its January 2026 meeting. That was in line with expectations, after three consecutive rate cuts last year that pushed borrowing costs to their lowest level since 2022.
Despite perpetual panic over a supposedly deteriorating labor market, a second shoe has yet to drop, with the unemployment rate humming near historic lows at 4.3%. And although net job growth across 2025 was mild — the Committee for a Responsible Federal Budget found the economy added a net 359,000 jobs — that stems from the White House’s intentional crusade to slash 324,000 jobs from the federal government. The Department of Government Efficiency’s moves in early and mid-2025, haphazard and arbitrary at times, brought federal employment to its lowest level in 60 years.
And although those DOGE reforms failed to target the entitlements that drive federal spending, the budget deficit for the first third of the current fiscal year is down 20% from when Trump took office. That’s in large part due to Trump’s deregulatory executive agenda and the supply-side reforms of his signature domestic achievement, the tax-cutting One Big Beautiful Bill Act.
Such deficit reduction is arguably the silent yet primary factor driving inflation’s overdue decline. While inflation remains above its 2% maximum target, consumer price index inflation, which was at 3% by the end of Joe Biden’s presidency, fell to 2.4% in January. And core CPI, which was at 3.3%, has fallen to 2.5%. Core CPI, the preferred inflation measure of the Fed because it excludes the volatile categories of food and energy, is now at its lowest point since Biden lit the economy on fire by signing his cynically named “American Rescue Plan” into law.
The labor market isn’t anywhere near recession territory, nor is it far too hot as it was during the most inflationary period of Bidenomics. And inflation is finally coming down in steady, sure steps, without a corresponding cooling of economic growth. In fact, the reverse is true. Economic growth is running north of 4% while productivity growth is closer to 5%, the …
A Goldilocks first year for Trump 2.0
Are they actually going to vote on something real?
If you want to be a pessimist, the worst economic news for President Donald Trump during his first full year back in the Oval Office is that the Federal Reserve cannot possibly justify slashing the interest rate charged by banks to borrow from each other overnight.
If you want to be an optimist, you just have to look at why the federal funds rate is so static. After all, the Fed left it unchanged at the 3.5%–3.75% target range in its January 2026 meeting. That was in line with expectations, after three consecutive rate cuts last year that pushed borrowing costs to their lowest level since 2022.
Despite perpetual panic over a supposedly deteriorating labor market, a second shoe has yet to drop, with the unemployment rate humming near historic lows at 4.3%. And although net job growth across 2025 was mild — the Committee for a Responsible Federal Budget found the economy added a net 359,000 jobs — that stems from the White House’s intentional crusade to slash 324,000 jobs from the federal government. The Department of Government Efficiency’s moves in early and mid-2025, haphazard and arbitrary at times, brought federal employment to its lowest level in 60 years.
And although those DOGE reforms failed to target the entitlements that drive federal spending, the budget deficit for the first third of the current fiscal year is down 20% from when Trump took office. That’s in large part due to Trump’s deregulatory executive agenda and the supply-side reforms of his signature domestic achievement, the tax-cutting One Big Beautiful Bill Act.
Such deficit reduction is arguably the silent yet primary factor driving inflation’s overdue decline. While inflation remains above its 2% maximum target, consumer price index inflation, which was at 3% by the end of Joe Biden’s presidency, fell to 2.4% in January. And core CPI, which was at 3.3%, has fallen to 2.5%. Core CPI, the preferred inflation measure of the Fed because it excludes the volatile categories of food and energy, is now at its lowest point since Biden lit the economy on fire by signing his cynically named “American Rescue Plan” into law.
The labor market isn’t anywhere near recession territory, nor is it far too hot as it was during the most inflationary period of Bidenomics. And inflation is finally coming down in steady, sure steps, without a corresponding cooling of economic growth. In fact, the reverse is true. Economic growth is running north of 4% while productivity growth is closer to 5%, the …
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