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Projected inflation trends after Biden leaves office January 2025
Executive summary
Forecasts and recent data in the provided reporting point to inflation moving above 2% but remaining below the pandemic peak: several forecasters expect CPI around 2.9–3.2% for 2025–26 while some measures and surveys show expectations nearer 2.3%–3.6% depending on horizon (Deloitte, RBC, CEPR, New York Fed) [1] [2] [3] [4]. Short-term momentum in 2025 depends heavily on tariffs, early‑year monthly readings, and whether high months from 2024 roll out of 12‑month comparisons [2] [5] [1].
1. Why “after Biden leaves office January 2025” matters — limited direct control but real policy channels
The presidency influences inflation indirectly through tariffs, fiscal priorities, regulatory choices and appointments that shape monetary policy transmission; forecasters explicitly model tariff policy as a driver of higher consumer prices, and Deloitte cautions that sustained tariffs could raise CPI into the ~3% range in 2025–26 [1] [6]. Available sources do not mention a specific formula tying the exact January 2025 transfer of power to a deterministic inflation path; instead the research treats policy changes (eg, tariffs) and macro conditions as inputs to scenarios [1] [2].
2. What forecasters are projecting for 2025 and 2026
Consultancies and banks in the dataset expect headline and core inflation to drift above 3% by late 2025 and into 2026 if tariffs and other pressures persist: RBC projects headline and core CPI above 3% by end‑2025, and Deloitte’s baseline expects average CPI growth ~2.9% in 2025 and ~3.2% in 2026 [2] [1]. These are scenario‑based projections, not guarantees; Deloitte explicitly warns its tariff pass‑through assumption (about 60% passed to consumers) could understate inflationary impulse if costs are passed through more fully [1].
3. Recent readings and market/consumer expectations
Actual CPI readings in late 2025 show a re‑acceleration to around 3% annual CPI in September 2025, with core CPI also at roughly 3%—data that markets and analysts noted when assessing Fed decisions [7] [8]. Consumer inflation expectations have been elevated: the New York Fed’s April 2025 survey recorded a 1‑year median expectation near 3.6% and longer‑horizon upticks, while market surveys tracked 3.2–3.4% expectation measures in autumn 2025 [4] [9].
4. Key drivers that will decide the path after January 2025
Sources emphasize several determinants: tariff policy and its pass‑through to goods and eventually services, the trajectory of monthly inflation in early 2025 (which affects 12‑month comparisons), labor‑market tightness and long‑run expectations, and Fed policy response. The Dallas Fed notes that if early‑2025 monthly inflation averages ~2% it would materially reduce 12‑month rates as high months from 2024 fall out; if not, the 12‑month rate could remain elevated [5]. RBC and Deloitte flag tariffs and spillovers to services as notable upside risks [2] [1].
5. Competing narratives and political framing
Political actors differ: the White House and administration spokespeople may emphasize short stretches of low monthly readings as “victory” while critics and many economists highlight that inflation has settled nearer 3% and remains above the Fed’s 2% goal [10] [7]. The Guardian and international outlets report that inflation remains a salient political concern for voters even if it is far below the pandemic peak—underscoring how politics shapes interpretation of the same data [11] [8].
6. Plausible scenarios and what to watch for in early 2025
Forecasters have mapped out multiple plausible outcomes: a “soft‑landing” path where inflation falls back toward 2% if monthly readings are low and Fed policy holds; a moderate‑inflation path around 2.5–3.2% if tariff effects and service spillovers persist; and a higher path if tariffs deepen and pass‑through accelerates. Watch February–April 2025 monthly CPI/PCE prints, tariff announcements or reversals, and shifts in consumer inflation expectations—these are the most immediate signals that will tilt projections one way or another [5] [2] [1].
7. Limitations and what reporting does not tell us
Available sources do not provide a single consensus “post‑January 2025” forecast tied strictly to a change in president; instead they present scenario ranges and conditional forecasts that hinge on policy choices [1] [2]. Also, some measures (CPI vs PCE vs surveys) diverge in level and timing; CEPR documents expectations near 2.3% by 2025Q1 in some series, showing disagreement across indicators [3]. Any projection must account for measurement differences and scenario assumptions [3] [1].
Bottom line: Current reporting and forecasts show a realistic probability that inflation will hover around the high‑2% to low‑3% range through 2025–26 absent dramatic policy shocks, but tariffs, early‑year monthly momentum, and shifts in expectations could push outcomes higher—forecasters differ, and the near‑term monthly data in early 2025 will be decisive [2] [5] [1].