Trump declared inflation ‘defeated’ — now the U.S. is projected to have the worst inflation among G7 countries in 2026

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What a difference a war makes. In January 2026, President Donald Trump boasted to G7 leaders and others at the World Economic Forum in Davos that his team had “defeated” inflation in the U.S. (1).

“Grocery prices, energy prices, airfares, mortgage rates, rent and car payments are all coming down, and they’re coming down fast,” he said.

At the time, U.S. inflation stood at 2.4% year-over-year, compared to 2.7% overall in 2025 (2). By comparison, inflation stood at 3% when President Joe Biden left office in January 2025 (3), down from a post-pandemic high of 9.1% in June 2022, when prices were skyrocketing globally (4).

Still, while inflation eased somewhat under Trump, it remained higher than the Federal Reserve’s long-term annual target of 2% (5).

Now the U.S. and Israel’s war in Iran is expected to make inflation worse, according to a report published by the Organisation for Economic Co-operation and Development (OECD) in March 2026 (6).

The OECD predicts that America could have the highest inflation in the G7 by the end of this year, in large part due to the war and the ongoing impact of Trump’s tariff policy.

Here are the report’s projected 2026 inflation rates for G7 countries:

  • U.S. 4.2% (up from 2.6% in 2025, according to its calculation)

  • U.K. 4% (up from 3.4%)

  • Germany 2.9% (up from 2.3%)

  • Canada 2.4% (up from 2.1%)

  • Italy 2.4% (up from 1.6%)

  • Japan 2.4% (the outlier, down from 3.2%)

  • France 1.8% (up from 0.9%)

If these projections are to be believed, some of the very staples Trump said were getting cheaper are getting more expensive.

Here’s why.

The OECD warns that inflation could spike as the Middle East conflict disrupts supply chains and the normal flow of trade. The longer it drags on, the worse things could get.

In particular, energy prices are an issue: Trump can no longer claim the cost of energy is down.

Brent crude, which is the global benchmark for oil prices, surged well above $100 per barrel in the first few weeks of the conflict, before retreating as low as $92 after the announcement of a two-week ceasefire — then briefly surging again above $100 on April 13 following a breakdown in peace talks (7).

Either way, those prices far exceed the $67 per barrel recorded on Feb. 27, the day before the war began.

And with Trump now blockading the Strait of Hormuz (8), as well as the damaged infrastructure and proposed transit fees for passing ships, oil prices could stay elevated in the near term. In fact, according to a report by The New York Times, even if the war ends, energy prices are likely to remain above the prewar baseline for months, thanks to damage to energy infrastructure (9).

But what about groceries? As PBS reports, farmers in the U.S. and elsewhere are worried about the prices for key components of the fertilizers they need to grow their crops, which are normally shipped through the Strait of Hormuz (10).

That’s one good reason the cost of groceries is likely to rise.

Elsewhere, the U.S. Department of Agriculture (USDA) predicts food prices will rise 3.6% this year, with the cost of groceries rising 3.1% alone, faster than the 20-year average of 2.6% (11).

According to the USDA’s estimations, beef, fish, vegetables, sweets and baked goods are all projected to become more expensive.

Read More: Taxes are changing under Trump’s ‘big beautiful bill’ — 4 reasons why retirees can’t afford to waste time

The OECD adds that Trump’s tariffs, and related counter-tariffs, are still contributing to inflation.

While the U.S. Supreme Court ruled that Trump couldn’t impose tariffs under the International Emergency Economic Powers Act, he still has many tariffs in place on many imports, and other countries have responded by imposing tariffs on U.S. goods.

According to Yale’s Budget Lab, the U.S. had an effective tariff rate of 10.6% in January 2026 (12). Outside of Trump’s since-rescinded tariffs from 2025, that’s the highest rate since World War II.

For context, when he took office in January 2025, the rate was about a fifth of that, at 2.3%, according to an analysis from the University of Pennsylvania (13). And Yale’s Budget Lab notes that tariffs will continue to add to the cost of imported cars, electronics and clothing (12).

Inflation is concerning enough. But its likely consequence — slower economic growth — is equally worrying.

As the costs of living and borrowing rise, demand and investment fall, affecting businesses and employment. The U.S. Federal Reserve often boosts interest rates to help keep higher inflation in check, slowly the flow of money through the economy.

The OECD expects U.S. GDP growth will slow in 2026 to 2%, compared to a 2.9% global average (6).

And this comes as a large chunk of the population is already dealing with an affordability crisis. Roughly one-third of middle-class Americans are struggling to afford basic necessities like food, housing and child care, according to Brookings (14).

The problem is that when everyday expenses start stretching your budget, figuring out what to cut, save or invest can feel overwhelming. In these situations, getting guidance from a professional could help you map out a plan that fits your income, goals and long-term financial health.

That’s where online platforms like Advisor.com come in, connecting you with an expert near you for free.

Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.

Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best-suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.

Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That’s when you can start taking steps to protect your finances from potential economic shocks.

For instance, financial experts often recommend keeping three to six months’ worth of living expenses in savings so that you have a safety net if an unexpected expense pops up.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.

That’s ten times the national deposit savings rate, according to the FDIC’s March report.

Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.

Once you’ve built up an emergency fund, it may be worth taking a closer look at your investment portfolio to see whether any adjustments make sense.

One asset that tends to get more attention during periods of economic uncertainty is gold. That’s because safe haven assets like precious metals are often viewed as a hedge when markets turn volatile.

Unsurprisingly, the precious metal has surged more than 50% over the past year — significantly outperforming the S&P 500 index, which has delivered roughly 23% returns over the same 12 months, as of April 15 (15).

Even experts say the metal deserves a place in a diversified portfolio.

“One should have between five and 15% of their portfolio in gold because of the fact of how it works with the other components,” said Ray Dalio, the founder of Bridgewater Associates, the largest hedge fund in the world, during an interview with the All-In Podcast published in March 2026 (16).

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their investments against economic uncertainty.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

In addition to gold, property has historically been one of the most popular ways investors try to stay ahead of inflation. As construction and land costs rise, home values often follow — and rents usually increase as well.

That trend has been especially noticeable in recent years. For example, rents for tenant-occupied nonfarm housing have jumped about 31% since the end of 2019 — a much faster increase than the 20% rise recorded in the previous six years, according to Deloitte (17).

But you don’t necessarily have to buy and manage a property yourself to get in on the action. Some investment platforms now allow investors to earn potential rental income without dealing with mortgages, maintenance or tenants.

Founded by former Goldman Sachs real estate investors, mogul offers fractional ownership in blue-chip rental properties.

Their team handpicks the top 1% of single-family rental homes nationwide for you. This way, you can invest in institutional-quality offerings for a fraction of the usual cost — while also receiving monthly rental income, real-time appreciation and tax benefits.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

Another option for real estate investors is investing in multifamily properties. However, finding and sourcing these properties yourself can be cumbersome, capital-intensive and full of headaches.

But there are plenty of real estate investment opportunities out there, so long as you know where to look. Plenty of opportunities are marketed to accredited investors, but not all opportunities are created equal.

In fact, a 2025 report published by JPMorgan Chase quoted Vice Chair of Commercial Banking Al Brooks as saying, “I think multifamily housing is absolutely where you want to be as an investor (18).”

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.

Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

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— With files from Laura Boast.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

@wsj (1); U.S. Bureau of Labor Statistics (2), (3); Federal Reserve Bank of Chicago (4); Board of Governors of the Federal Reserve System (5); Organisation for Economic Co-operation and Development (6); BBC (7); CNBC (8); The New York Times (9); PBS (10); U.S. Department of Agriculture (11); The Budget Lab at Yale (12); Penn Wharton Budget Model (13); Brookings (14); APMEX (15); @allin (16); Deloitte (17); JPMorgan Chase (18)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

 
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