The Treasury Department and President Donald Trump are espousing different views on the amount of inflation currently in the economy.
The Treasury Department said Monday that inflation “remained above the target of 2 percent in the third quarter,” even as President Donald Trump said on CBS News’ 60 Minutes on Sunday that there was “no inflation.”
“Inflation remained above the target of 2% in the third quarter,” the Treasury Department said in a press release. As of September 2025, inflation—as measured by the headline consumer price index (CPI)—was 3% on a 12-month basis. The elevated annual growth partly reflects the strong price pressures from September 2024 to January 2025, in which headline CPI rose by 4.1% at an annualized rate. From January 2025 to September 2025, CPI growth was more moderate at 2.5% at an annual rate.
Inflationary Trends
According to the Treasury Department, CPI inflation for energy goods and services picked in the third quarter to an average 0.4% per month, after rising an average 0.2% per month in the second quarter.
Inflation for rent of housing services (rent of primary residence and owners’ equivalent rent) averaged 0.3% per month in the third quarter, where it has held for the previous three quarters. Over the year through September 2025, rent of housing inflation was 3.7%, the slowest annual pace since December 2021.
The housing sector is among the areas of the economy experiencing softness now, Bessent noted in an interview on CNN’s State of the Union. “If the Fed brings down mortgage rates,” Bessent suggested, “they can end this housing recession.”
Though not directly impacted by Fed rate cuts, mortgage rates have dropped over the past few months, but the overall housing market remains weak.
Bessent said that the Trump administration worked to lower the deficit-to-gross-domestic-product ratio from 6.4% to 5.9% through government spending cuts, which should help to push down inflation.
However, core inflation remains above the Fed’s stated target of 2%. According to the Treasury Department, monthly core CPI inflation averaged 0.3% in the third quarter. Over the 12 months through September 2025, the core inflation rate was 3%. So far this year, annual core inflation has ranged between 2.8% and 3.1%, save for the 3.3% rating realized in January from when President Trump assumed office.
“The Treasury’s latest missive is in line with what the bond market’s been telling investors for months: inflation may have come down from its peaks, but it’s stabilizing at a structurally higher level than desired,” says Charles Urquhart, Fixed Income Resources Founder and CEO. “The official 3% number is ‘no inflation,’ only in official, political speak, not in the market. With wage increases hovering near 4% and continued pressure in the service economy, the Fed is still gun-shy and long yields haven’t retraced down with policy cuts.”
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