Trump’s Day 1 Orders Target Inflation. Will They Work? | Global News Avenue

Among the series of executive orders President Donald Trump issued on Inauguration Day were several that targeted the heart of inflation: housing and energy costs.

Trump signed a series of executive orders on Monday to kick off his presidency, several of which are aimed at curbing rising consumer prices. He directed his administration to reduce regulations that drive up consumer prices, particularly for housing, energy and automobiles.

Other orders focus on energy production, halting policies in the Inflation Reduction Act of 2022 that promote the development of wind energy, solar energy and electric vehicles. He has also taken other steps to promote fossil fuel production, such as opening federal lands to oil drilling.

Housing and transport costs are important drivers of inflation, accounting for half of all household spending, according to a recent government survey. Therefore, reducing these costs will have a significant impact on living standards.

Voters put Trump in office to lower prices. Can he deliver?

The post-pandemic surge in inflation has eased since its recent peak in 2022, but Continue running above The Fed’s annual interest rate target is 2%. Voter survey finds continued price pressure is a major issue facing voters in election, propelling Trump into office.

Yodanis Petsas, an economics professor at the University of Scranton, said if Trump’s energy orders lead to increased oil production, it could put downward pressure on fuel costs. However, that assumes Trump’s measures ultimately have the desired effect, which may depend on details of the plan that have yet to be finalized.

“How they will be implemented, we still need to see,” Petsas said.

One of Trump’s orders cited historically high housing prices, pointing to regulation as an area ripe for lowering costs. The order says regulatory requirements account for 25% of the cost of building a new home. While Trump didn’t specify, he seemed to be referring to one 2021 analysis based on builder survey by National Association of Home Builders.

The analysis found that 23.8% of new home construction costs are due to regulations. The study also noted that the regulations that drive up home prices — namely, zoning approvals, building codes, building codes and other rules — are mostly created and enforced at the local level, sometimes in response to federal guidelines.

Trump’s predecessor, Joe Biden, also used executive orders to reduce housing construction regulations and increase housing supply, targeting local land use regulations. Petsas again said the question lies in the details of how the order will be implemented and whether it will ultimately affect prices.

Will Trump’s executive actions targeting inflation affect your finances?

If these measures do dampen inflation, it may not be soon.

“For the average person, there won’t be an immediate impact on how much we spend on groceries and things like that,” Petsas said.

Robert Litan and Peter Shane, fellows at the Brookings Institution think tank, wrote in a commentary that Trump’s efforts to deregulate during his first term did not always go well. The two calculated that the government won only 22 percent of court cases when opponents challenged its regulatory actions. As one example, Trump’s Department of Energy was unable to delay implementation of energy-efficiency standards for ceiling fans.

“Unless agency lawyers can provide stronger legal support for their clients’ efforts, the impact of his second administration’s deregulation will be significantly diminished,” Litan wrote.

If Trump’s deregulation efforts succeed, other Trump actions could erase gains on inflation. At the same ceremony where he signed the executive orders, Trump said he was considering imposing tariffs on Mexico and Canada starting on February 1, Set new deadline He had earlier threatened to implement a policy on his first day as president.

Many economists believe tariffs could drive up prices as businesses pass on the costs of tariffs to consumers. That could offset any progress Trump’s initiatives might have made and even add to inflationary pressures.