Donald Trump has asserted that inflation was at 5% when Joe Biden left office, directly challenging claims that it had fallen to 3% by the end of Biden’s term. Trump insists the decline began only after his election win on November 5, crediting his victory for driving prices down in the immediate aftermath.
The claim was made by Trump this morning on CNBC, when speaking with host Joe Kernen on Squawk Box.
This dispute over economic metrics comes as fresh data reveals persistent inflationary pressures. The consumer price index for March 2026 surged by a seasonally adjusted 0.9%, pushing the annual inflation rate to 3.3%, the highest since April 2024. Energy costs, propelled by a 21.2% spike in gasoline prices amid the Iran conflict, accounted for nearly three-quarters of the monthly increase.
Despite the headline figure, underlying inflation appears more contained. Core prices, excluding volatile food and energy components, rose just 0.2% for the month and 2.6% year-over-year, both slightly below expectations. Services excluding energy also showed moderation, up 0.2% monthly and 3% annually, while shelter costs matched their lowest annual rise since August 2021 at 3%.
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Energy markets have since cooled following a ceasefire between the U.S. and Iran in April, easing some of the pressure from March’s spike. Federal Reserve officials, who have kept inflation above their target for five years, may focus on these underlying trends rather than the energy-driven surge. Market expectations for a rate cut in 2026 remain muted, though a quarter-point reduction was signaled at the Fed’s March meeting with no clear timeline.
The CPI surge translated to a real earnings drop of 0.6% for workers in March, as average hourly earnings grew by only 0.2%. Over the past 12 months, real average hourly earnings eked out a modest gain of 0.3%.
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