Trump’s Tariffs Didn’t Break the Economy, Wall Street and the Media Got It Wrong

The experts predicted economic chaos. The data now shows Trump’s tariff strategy wasn’t the disaster Americans were promised.

For years, Wall Street economists and much of the national media warned that tariffs imposed during the Trump administration would cripple the U.S. economy and permanently drive inflation higher. Those claims became a central talking point in debates over trade, monetary policy, and interest rates.

The latest inflation data tells a different story.

New CPI data undercuts claims that Trump’s tariffs would fuel inflation. Wall Street and media predictions failed to match economic reality.

November 2025 Consumer Price Index (CPI) figures came in well below expectations. Headline CPI registered 2.7%, while Core CPI measured 2.6%, under forecasts of 3.1% and 3.0%, respectively. The numbers directly contradict the long-standing narrative that Trump-era tariffs would trigger sustained inflationary pressure.

As noted by market commentator Charles V. Payne, the economic consensus surrounding tariffs has failed to materialize.

Tariffs Fell Short of Inflation Predictions

A central argument against tariffs was that costs would be fully passed on to consumers. However, Reuters economic analysis shows tariff pass-through reached only about 40% by September 2025, and even that increase occurred gradually rather than in the sharp surge many economists predicted.

Businesses absorbed costs, supply chains adjusted, and competitive pressures limited price increases. Rather than sparking an inflation spiral, the tariff effects proved far more muted than forecast.

A Historic Shutdown Complicated the Data

Economic perceptions were further clouded by an unprecedented 43-day federal government shutdown in October–November 2025, the longest in U.S. history. The shutdown disrupted standard data collection at the Bureau of Labor Statistics (BLS), forcing the agency to rely more heavily on year-over-year inflation metrics rather than its usual monthly survey methods.

The BLS acknowledged this was a rare departure from normal practice. While the data remains credible, the disruption delayed reporting and contributed to uncertainty at a critical moment for markets and policymakers.

Markets React as the Narrative Shifts

Once the delayed inflation data was released, markets responded quickly. Bitcoin climbed past $89,000, stock futures moved higher, and investors increasingly began pricing in the possibility of Federal Reserve rate cuts in 2026.

Some academic economists echoed the shift, with a Harvard economist characterizing the inflation data as broadly positive. Still, Federal Reserve officials remain cautious. Chair Jerome Powell, in remarks earlier in 2025, emphasized that the Fed would continue balancing inflation control with labor-market stability and remain firmly data-dependent.

The Broader Takeaway

The broader lesson is difficult to ignore.

Inflation forecasts tied to Trump’s tariffs were overstated. Media coverage amplified worst-case scenarios that failed to materialize. And policy debates were shaped by assumptions that the data has now undermined.

Trump’s tariffs did not break the economy. The predictions did.

As inflation continues to moderate, the gap between narrative and reality is becoming increasingly clear—and increasingly difficult to dismiss.

Sources

• Reuters — U.S. tariff pass-through and inflation analysis (2025)

• U.S. Bureau of Labor Statistics — CPI releases and methodology notes (November 2025)

• Charles V. Payne — Market commentary on inflation data (December 2025)

• Federal Reserve — Chair Jerome Powell public remarks on inflation and employment (2025)