Trump leans on government power in push to lower prices

Nearly one year after returning to the White House, President Trump has embraced a strategy of using the force of government to try to push down prices, outlining some of his thinking in a speech in Detroit.

Over the past month he has combined regulatory threats and punitive actions aimed at companies and policymakers, opening an investigation into Federal Reserve chair Jerome H. Powell — ostensibly in a bid to force the central bank to lower interest rates rapidly — and targeting industries from defense contractors to oil companies, big banks and real estate investors.

Policymakers and economists, including Glenn Hubbard, have warned the approach is unpredictable and risky. The Fed has been lowering interest rates gradually to avoid stoking inflation, and Mr. Hubbard said aggressive pressure could backfire and even produce a spike in government bonds; Mr. Powell has called the inquiry political retribution.

Mr. Trump has continued to demand lower rates publicly and promised unspecified plans on affordability even as official data showed prices rose about 2.7 percent year over year in December and grocery costs increased last month. He has threatened measures on credit card fees, large investors in housing and health insurers but has not released full details or enacted those policies, and some officials worry about what the next escalation might bring.

Key Topics

Politics, Donald Trump, Federal Reserve, Jerome Powell, Detroit, Inflation