Rising living costs remain a significant issue for many Americans, prompting President Donald Trump to assert that the responsibility lies with his predecessor. During a rally in December 2025 in Mount Pocono, Pennsylvania, Trump claimed, “We inherited the highest prices ever, and we’re bringing them down,” emphasizing the progress his administration had made in curbing inflation. He further proclaimed, “We’re getting inflation — we’re crushing it,” highlighting the stock market gains and 401(k) growth as signs of economic recovery.
In his recent State of the Union address, Trump reiterated that his administration’s policies are leading to a decrease in prices. He remarked, “Those prices are plummeting downward,” reflecting a sense of optimism about the economic landscape. Some evidence backs these assertions: the U.S. consumer price index saw a 2.4% increase for the year ending January 2026, a significant drop from the sharp 9.1% increase reported in June 2022. However, despite these improvements, many Americans still grapple with high costs, including a 30% increase in grocery prices since January 2020 and notable spikes in electricity and car insurance costs of 41% and 56%, respectively.
While inflation rates are decreasing, they still exceed the Federal Reserve’s target of 2%. The Federal Open Market Committee acknowledged that “inflation remains somewhat elevated,” halting recent interest rate cuts and indicating that the battle against inflation continues. Compounding the situation, ongoing conflicts, such as the war in Iran, have resulted in rising gas and energy prices, raising concerns about potential prolonged inflation.
Trump pointed to rising wages as evidence of his administration’s success, stating, “You’re getting lower prices, bigger paychecks … you’re getting much higher wages.” Wage growth does exist, but it’s keeping pace with, rather than significantly exceeding, inflation, with average wage increases around 3.3% reported by the U.S. Bureau of Labor Statistics.
One of Trump’s strongest arguments comes from the performance of the markets. According to Fidelity, the average 401(k) balance increased by 9% over the previous year, reaching an all-time high of $144,400 in Q3 of 2025. Despite this positive news, volatility remains a concern as major indices like the S&P 500 and Nasdaq have experienced slight year-to-date declines due to growing geopolitical tensions.
Historically, savvy investors have found ways to protect themselves from inflation’s impact, bolstering the importance of diversifying investment portfolios. Gold, for instance, has consistently proven to be a reliable asset during economic turmoil. Its price surged nearly 80% over the past year, positioning it as a strong hedge against inflation. Financial experts, including Ray Dalio, founder of Bridgewater Associates, advocate for including gold in investment portfolios, citing its ability to diversify risk.
Simultaneously, real estate continues to be a robust asset class for fighting inflation. Property values typically rise with inflation due to increasing costs of materials and labor. Data from the S&P CoreLogic Case-Shiller U.S. National Home Price Index reveals a nearly 40% jump in home values over the past five years. However, high home prices and elevated mortgage rates present challenges for potential buyers. For those interested in real estate without the responsibilities of direct ownership, platforms like Arrived allow individuals to invest in shares of vacation and rental properties, providing passive income opportunities.
Another option for accredited investors interested in real estate is to partner with firms like Lightstone Group through their Lightstone DIRECT platform. This approach enables investment in institutional-quality multifamily properties while reducing intermediary costs. Lightstone has a strong track record, with billions in assets under management across various real estate verticals.
For those considering stocks as a hedge against inflation, investment experts suggest focusing on high-quality equities. Renowned investor Warren Buffett advises owning an S&P 500 index fund for instant diversification among America’s largest companies without the need for constant monitoring. Platforms like Robinhood make it easier to invest in stocks and ETFs, providing commission-free trades and the ability to set up automatic investments.
Amid rising costs, retirees face particular challenges as fixed incomes can make it harder to manage expenses in an inflationary environment. Senior-focused organizations like AARP offer valuable resources, discounts, and financial guides tailored to help older Americans navigate economic turbulence and optimize their retirement planning.
In summary, while the economy shows signs of improvement under the current administration, many Americans continue to feel the pressures of ongoing high costs. Financial savvy and strategic investments in assets like gold, real estate, and diversified stock portfolios may provide opportunities to mitigate inflation’s impacts and enhance wealth over time.
