Trump’s 25% Iran Tariffs Explained

Summary

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Prof G Markets — “Trump’s 25% Iran Tariffs Explained”

Date: January 14, 2026
Hosts: Ed Elson, Scott Galloway (Prof G)
Guests: Maurice Obstfeld (Former IMF Chief Economist), Mark Zandi (Chief Economist, Moody's Analytics)

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Episode Overview

This episode unpacks the surprise announcement of a 25% tariff imposed by President Trump on all countries trading with Iran, positioned as a response to Iran’s government crackdown on widespread protests. The show delves into the economic roots of the Iranian unrest, the geopolitical and market implications of the new tariffs, and a sharp look at U.S. inflation data—explaining why the official numbers are misleading. Experts Maurice Obstfeld and Mark Zandi join to provide context and clarity.

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Key Discussion Sections

1. Market Snapshot & Tariff Announcement ([02:21]–[03:58])

• Ed Elson (Host): Markets slipped after inflation reports; oil prices rose following Trump’s Iran tariff announcement.
• Trump’s Move:
  • Announced a 25% tariff on any country doing business with Iran, effective immediately.
  • Motivation: Retaliation for Iran’s deadly response to anti-government protests.
  • Execution Unclear: The White House has not specified mechanisms or legal authority for the tariffs.

Notable Quote

“President Trump announced a 25% tariff on any country doing business with Iran... The decision is final and conclusive. However, the White House has not yet explained how the tariffs would be enacted or by what authority.” — Ed Elson [02:36]

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2. Iran’s Economic Crisis & Roots of Protest ([04:00]–[08:00])

Maurice Obstfeld (Guest):

• Long-standing Economic Woes:
  • Years of heavy sanctions; escalated by Trump ending Biden’s waivers.
  • Ongoing currency collapse: Rial down 80% in a year; inflation above 50%, now rising further.
  • Regime weakened geopolitically, cut off regionally.
  • Government printing money to pay bills, sparking inflation and public anger.
• Protest Dynamics:
  • Trigger: Hyperinflation and currency collapse making goods unaffordable.
  • Structural issues: Water scarcity and failing infrastructure add fuel.
  • “This is...probably the most severe threat to the regime internally since its beginning in 1979.” — Maurice Obstfeld [05:38]

Notable Quotes

“Over the last year, the currency fell by more than 80%. It fell by around 16% in December alone. Last year’s inflation rate, we believe, was above 50%. This year, it’s bound to be higher.” — Maurice Obstfeld [05:08]

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3. Analysis of the 25% Tariff—Effectiveness & Geopolitics ([08:00]–[11:25])

• Trump’s Approach:
  • Tariffs described as “all-purpose Trumpian response.”
  • Meant to target U.S. imports from countries trading with Iran (main partners: China, UAE, Turkey, Iraq).
• Geopolitical Reality:
  • U.S. has significant trade with Turkey and UAE, both critical allies.
  • Obstfeld doubts countries will cut trade with Iran quickly or pressure regime meaningfully.
  • “Mostly performative”—markets and targets expect posturing.
• Limited On-Ground Impact:
  • Unlikely that Iran’s regime will be swayed by tariffs alone; more concerned about potential military threats.

Notable Quotes

“At this point, we have to see what is exactly imposed...But I don’t think it’s going to have much impact on the situation on the ground in Iran. The regime is not looking at these and saying, ‘oh my God, we better negotiate or go easy on the demonstrators.’” — Maurice Obstfeld [10:15]

“The tariff has been the all-purpose Trumpian response to everything he doesn’t like.” — Maurice Obstfeld [08:35]

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4. Predicting Next Steps: Military Escalation & Market Risks ([12:10]–[14:55])

• What Happens Next:
  • Obstfeld forecasts tariffs will have minimal impact.
  • Major uncertainty: Potential U.S. military intervention, which could cause local instability but likely limited spillover.
  • Key point: No clear “day after” plan if the regime collapses.
  • Middle East remains a “fragile place,” with potential for unintended consequences.

Notable Quotes

“Trump has clearly been flexing his military muscles on the global stage and seems somewhat intoxicated with that. So it wouldn’t surprise me to see some sort of military strike.” — Maurice Obstfeld [12:56]

“Middle East is already a fragile place and there are unintended consequences from further dropping matches onto the tinder.” — Maurice Obstfeld [14:45]

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5. U.S. Inflation Report: Data Distortions & What’s Really Happening ([18:43]–[31:00])

Market Analysis ([18:43]–[19:37])

• Headline: December CPI at 2.7% (unchanged), Core CPI at 2.6%. But: Are these numbers reliable?

Mark Zandi (Guest):

• Data Flaws Explained ([19:58]–[22:10]):
  • Bureau of Labor Statistics missed price surveys in October due to govt shutdown; assumed “no change” where there was no data.
  • Real inflation is about 3% (headline) and 2.9% (core) if adjusting for missing data.
  • Markets and Fed know the “fix”; general public and White House (per Zandi and Ed) do not.

Notable Quotes

“Inflation is still elevated and persistently elevated...once you make the correction for what happened in October, inflation is still about 3% year over year.” — Mark Zandi [20:27]

Energy Prices, AI Data Center Impact ([24:22]–[25:59])

• Electricity Prices Up:
  • Data centers—especially AI applications—driving a surge in power demand.
  • “That’s AI. That’s AI Straight up... demand from data centers is enormous, putting a lot of pressure on the electric power grid... we’re going to see a lot of demand from these AI data centers.” — Mark Zandi [24:59]

Fed Independence & Political Risks ([26:41]–[30:47])

• Historical Perspective:
  • Loss of independent central bank leads to high inflation (Nixon administration, UK, Turkey, Argentina).
• Worry Over Politicization:
  • Trump reportedly wants further interest rate cuts; criminal investigation into the Fed is likely a pressure tactic.
  • Markets haven’t yet reacted strongly—awaiting presidential nominations and Supreme Court rulings.

Notable Quotes

“A cornerstone of a well functioning market economy like our own is an independent central bank—and independent Fed...The result will be inflation.” — Mark Zandi [26:41]

“If the Fed does start—if it feels like the Fed has lost independence and is setting policy based on politics and not what’s good for the economy—bond investors will ultimately say, ‘enough already.’ And you will see long term interest rates rise.” — Mark Zandi [30:24]

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6. Final Reflections: Why the Numbers Matter ([31:00]–End)

• Ed Elson’s Take:
  • Emphasizes that BLS data, typically trusted, is actually wrong in this instance due to a rare and transparent process problem—not political manipulation.
  • Points out that tariffs have clearly driven up prices: “There is no question what tariffs have done to prices in America. Prices have gone up and they have gone up a lot.”

Notable Quotes

“The President will try to say the opposite has happened...But you can either investigate these numbers in detail, as we have just done...or you can simply go to the grocery store. Either way, you will conclude inflation is only getting worse.” — Ed Elson [31:50]

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Notable Timestamps

• [02:36] — Trump’s 25% tariff announcement and market impact
• [04:18] — Maurice Obstfeld explains Iran’s economic collapse
• [08:35] — Why the tariff is likely ineffective
• [12:23] — Obstfeld on prospects for military action
• [18:43] — Introduction to inflation/CPI discussion
• [20:27] — Mark Zandi: Real inflation is higher than reported
• [24:59] — Electricity prices and AI data centers
• [26:41] — The danger of undermining Fed independence
• [31:50] — Ed Elson’s summary: tariffs and inflation

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Overall Tone

Direct, analytical, and sometimes skeptical. The hosts and guests maintain a no-nonsense, data-driven approach, with healthy skepticism toward policy theatrics. There’s frustration over misleading headline numbers and concern about the risks of politicized economic policymaking. The tone is fast-paced, urgent, and aimed toward financial literacy and clear-eyed evaluation.

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Key Takeaways

• Iran’s crisis is far larger than U.S. tariffs can solve. The country faces historic inflation, currency collapse, and severe civil unrest.
• Trump’s new tariffs are likely to be more symbolic than effective—they are unlikely to change Iranian behavior, may not be consistently enforced, and risk damaging U.S. alliances and trade deals.
• U.S. inflation is higher than reported due to a statistical quirk from the October government shutdown—actual headline inflation is around 3%.
• AI’s energy demand is driving up electricity prices—an underappreciated consequence of the current tech boom.
• There’s a real risk in undermining the Federal Reserve’s independence, as politicized monetary policy almost always leads to higher inflation, potentially eroding market and investor trust.

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For listeners focused on capital markets, geopolitics, and economic data accuracy, this episode provides a deeply informed and timely breakdown of two major intersecting stories.

Transcript

[A]

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[D]

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[B]

Welcome to Prof. G Markets. I'm Ed elson. It is January 14th. Let's check in on yesterday's market vitals. Major indices fell from recent highs. Treasury yields declined after the latest inflation report. More on that. Oil prices rose. On Trump's comments on Iran. We'll get to those in a moment. And finally, JP Morgan shares dropped 4% after fourth quarter. Investment banking fees missed expectations. Okay, what else is happening? President Trump announced a 25% tariff on any country doing business with Iran. Trump wrote that the order is, quote, effective immediately and that the decision is final and conclusive. However, the White House has not yet explained how the tariffs would be enacted or by what authority. It appears the move is a response to the Iranian government's violent crackdown on protesters, which has resulted in thousands of civilian deaths. In a Tuesday morning Truth Social Post, President Trump said he has canceled talks with Iranian officials and he's urged Iranians to, quote, keep protesting and take over your institutions. The protests began in late December as inflation and Iran's collapsing currency, the rial, began, made everyday goods unaffordable. They've since gained momentum, morphing into wider demonstrations against the Iranian regime. Here to explain the situation in Iran and what these tariffs might mean for the country, we're speaking with Maurice Otsfeld, former chief economist for the International Monetary Fund and senior fellow at the Peterson Institute for International Economics. Maurice, thank you for joining us on property markets.

[D]

Sasha.

[B]

So we've seen this crackdown from the Iranian regime. Then we see the tariffs announced from Trump just as a beginner. What is actually happening in Iran? What are these protests about, and what is the economic situation over there?

[D]

Well, the economic situation has obviously been grim for many years with ongoing sanctions. When Trump came into office, he rescinded some of the very mild waivers that Biden had issued in order to promote nuclear talks, and so that intensified the pressure. Furthermore, we've seen the Iranian regime weakened geopolitically over the course of the year with Israeli and US Strikes, with the evisceration of Iran's proxies abroad. And that, too, has harmed the economic situation. So as a result of that, what we've seen is the government basically trying to pay its bills by printing money. That sparked inflation. It sparked a huge depreciation of the Iranian currency, a huge, I should say, an accelerating depreciation. So over the last year, the currency fell by more than 80%. It fell by around 16% in December alone. Last year's inflation rate, we believe, was above 50%. This year, it's bound to be higher. So all of this is spilled over into frustration in the streets, starting with economic demonstrations, but then building up into a much wider conflagration that's spread across the country, including outside of the main urb, and reflecting a lot of frustration with the regime, with the corruption that people see, with the trampling of basic freedoms. And it looks like this is much more significant than the 2022 demonstrations and probably the most severe threat to the regime internally since its beginning in 1979.

[B]

It seemed like Everything reached a tipping point in December, or at least last month and last few weeks or so. Seems like a lot of this is economic. The hyperinflation you mentioned, also the collapse of the currency. What triggered this outburst that we've seen in the past month or so.

[D]

It seems to be really tied to the currency and the effect on inflation and what that's doing to just the cost of living. There's also been severe infrastructure crises, which I think are also contributing. The crisis over water availability has really been a severe problem. And that historically, throughout the Middle east, throughout the earth, droughts, shortages of water lead to severe social dislocation. So it's not really surprising that all this is coming to a head. The country, the regime have both been under extreme economic and geopolitical pressure. And sometimes you just see these explosions. Some smaller demonstrations can metastasize, not unlike what we saw on a much larger scale in Eastern Europe in 1989. Again, there were pent up economic frustrations, pent up frustrations about corruption. And then you get an explosion.

[B]

So then we see this violent crackdown from the Iranian regime. Civilians murdered, many have died. And then in response, tariffs. It seems like that has been the response from Trump. He's talked about the violence that we're seeing and he said, and in addition, we're putting this 25% tariff on Iran and also anyone who does any form of business with Iran. What do we know about the tariff? What do you make of this policy?

[D]

Well, the administration is also supposedly considering military options. Not clear what those are, but the tariff has been the all purpose Trumpian response to everything he doesn't like. So to some degree, I think they get discounted by the markets and even by some of the targets. At this point, you know, the tariffs are supposed to fall on US Imports from countries that quote, unquote, do business with Iran. The major trading partners for Iran are China first and foremost, but also the uae, Turkey, Iraq. And we have substantial trade with both Turkey and the uae. We've been negotiating trade deals with those countries. As with China, we depend on Turkey as a regional and NATO ally. We depend on the UAE as a geopolitical ally in the Middle East. So the betting is probably that either these countries will cut off trade with Iran, pressuring the regime, which I very much doubt that can happen in a short time horizon, or that these countries will pressure the Iranian regime to go easy on the protesters, which I also think is not very likely to happen. The Iranian regime is fighting for its life. So I see these as Being mostly performative. The countries know at this point, everyone knows at this point that there are deals to be made and that the use of tariffs for posturing is a standard part of Trump's toolbox. So at this point, we have to see what is exactly imposed, what is involved and what ends up sticking. But I don't think it's going to have much impact on the situation in the ground. In Iran, the regime is not looking at these and saying, oh my God, we better negotiate or go easy on the demonstrators. I think they're much more worried about the military threats that us could deploy.

[B]

Yeah, it seems that as you say, tariffs are a form of threat and then also military action are a form of threat. To use those two threats in the same sentence seems a little bit pointless. One of them is far more severe than the other. I assume the tariffs are therefore just kind of pointless in that sense.

[D]

Well, they're more severe, but they also inflict self harm on the United States. They implicate trade deals that are sort of in progress. I mean, you make a deal with Turkey, say you negotiate for many months and then suddenly you say, well, actually we're not going to respect that deal because we need to, because you're trading with Iran and Iran is being horrible to its people. But it was known that Turkey was trading with Iran. This isn't news to anyone. So the governments that have made trade deals can rightly say, okay, well, why didn't you bring this up in the first place?

[B]

We'll keep following this. I'm sure we'll probably have you back on to keep discussing this. What do you think happens next, if you had to make predictions about how this will start to play out at this point?

[D]

Well, as I said, I don't think that the tariffs are really going to be a material factor in all this. I think the big uncertainty is if and when the Trump administration will use some sort of military intervention and what that will be and what sort of destabilizing effects it can have on the ground and whether it'll bring the regime around or just induce them to attack American assets that are nearby, which some in the Iranian hierarchy very much would like to do. Trump has clearly been flexing his military muscles on the global stage and seems somewhat intoxicated with that. So it wouldn't surprise me to see some sort of military strike. The question is, does a one time action, as opposed to some sort of sustained military pressure, actually have a big effect on the situation there? Sustained military pressure, I think would raise questions by Trump's MAGA base in the US about what is he doing?

[B]

Is there anything that we could predict about what will happen in markets if we see some sort of military action? Do you think that this would be a particularly explosive event for markets, or perhaps it's already kind of assumed that we're going to get violent?

[D]

Well, it could affect oil prices. Oil prices have already factored that in to some extent. I don't see big regional geopolitical spillovers. Russia, China are not going to come to Iran's defense in this situation. They'll make noises about it. So I think it would probably end up being a fairly contained event. But the question is, would it actually make things better in a sustained way, bring down the regime? And if the regime is brought down, then what's the plan for the day after? And I don't think there's a plan for the day after. This could become Middle east is already a fragile place and there are unintended consequences from further dropping matches onto the tinder.

[B]

Okay. Maurice Obsfeld, former chief economist for the International Monetary Fund, senior fellow at the Peterson Institute for International Economics. Maurice, as always, appreciate your time. Thank you.

[D]

It's been a pleasure, Ed. Thank you.

[B]

After the break, another look at inflation. If you're enjoying the show, give Property Markets a follow.

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We're back with Crafty Markets. December inflation data came in without much of a shock, but costs remain high. According to the Consumer Price Index, headline inflation held steady at 2.7% year over year. That is unchanged from November and in line with forecasts. Meanwhile, core inflation rose 0.2% month over month and 2.6% year over year, slightly below estimates. Still, food, shelter and energy prices increased in December, up on the month and the year. The big question, however is, is this data even right? Because as we discussed last week, the government shutdown did impact the CPI report from November. And then the question now is, did it affect this one too? Here to help us answer that very important question, we have Mark Zandi, Chief Economist at Moody's Analytics. Mark, thank you for joining us again on profit markets.

[F]

Thanks, Ed. It's good to be with you.

[B]

So my first question to you. We discussed the previous CPI report and you explained to us how the previous one from November was flawed. We've got a similar report, a similar number, 2.7%. I guess my first question to you, is this report flawed as well?

[F]

That number is. It's a year over year growth rate. And so it reflects the problem the Bureau of Labor Statistics had back in October when they couldn't conduct the survey. And as a result, they assumed no change in prices for the vast majority of goods and services that they include in the cpi. So if you make an adjustment like we've done, like we did this last month and we did this month to account for that problem, inflation. CPI inflation is still 3% year over year. Core CPI inflation excluding food and energy is 2.9%. So, you know, once you make the correction for what happened in October, inflation is still elevated and persistently elevated.

[B]

So I feel like this is a far larger story than what we're seeing in the news right now where people are just kind of taking these numbers at face value. And what you're telling us is you're running your own analysis that is making up for the adjustments that they missed in October, which says that it's not 2.7%, it's 3%. And considering this is one of the biggest issues in the nation right now, I think that this should be kind of more of a big deal or at least people should talk about it more, I guess, tell us more about how the report is flawed. Like we saw, we know that they were missing data in October. How does that affect both November and December in the CPI report?

[F]

Well, there was no data in October. There was no survey because the government was shut down. So what does the Bureau of Labor Statistics do? They assume that prices for the things that they can't measure because there was no survey did not change. They're very transparent. They said, I have no idea what the number is because I didn't conduct a survey. It's zero. So that means, well, obviously that's wrong. We know that's not what happened? We know that prices did increase, that there was some inflation. And so because of, but because they assumed no inflation in October. You know, when you look at year over year after October, that's biased lower because of that assumption.

[B]

Right.

[F]

So you want to correct for that. And you know, there's no slam dunk, this is the right way to do it. But we took a crack at it and based on that work we found that inflation's not 2.7% on CPI inflation, it's 3%. And I think most people who really pay attention to this stuff, not the typical American, this would be pretty nerdy for them to get down and dirty with this kind of stuff. But for the folks that live and die and breathe what's going on in the financial system, financial markets, bonds, the stock market, folks at the Federal Reserve, they know this and they're making their own adjustments and they're all coming up with the same thing we are. Inflation's about 3%.

[B]

Yeah. Everyone except for basically the person that matters, which is the president who was on Truth Social, saying we have a great low inflation report and taking these numbers at face value, which seems like a problem, I guess we can just put that aside for now. Question, you know, we had this flawed report for November, we have the flawed report for December. How long is this going to go on for, do you think? How long are we going to be dealing with these CPI reports that we get from the BLS and which make these headlines, but then we have to add this asterisk and say it's not, it's not quite right.

[F]

Well, I think you're going to have to keep inviting me back for until next October because the numbers will be biased lower until we kind of do a round trip here and get to the other side. So next October. But even then you've got the problem on the other side, then it'll be biased too high because these numbers we're looking at today are too low. So to work all this out of the data probably takes several years, but right now it matters most because we're most worried about inflation in the context of the tariffs and policy and Fed policy and interest rates and everything else. So I think for the next year that's when it really matters. And this will be the case all the way through next October.

[B]

If we were to just look at these numbers that we did see in the report and now that we've gotten all of the gigantic asterisks out of the way, let's just look at the numbers. One thing that was striking to me, at least. Energy up 2.6% year over year. But there's some nuance here. Gasoline prices down 3 and a half percent, electricity prices up 6.7%. Nearly 7% increase in electricity prices. This jumped out to our research team. I guess our question is, is that data centers, is that AI? Do we have any?

[F]

That's AI. That's AI Straight up, Straight up AI. I mean, the demand for electricity from data centers is enormous. It's putting a lot of pressure on the electric power grid and generation and, and the prices are rising very, very rapidly. The other thing that happened last month though was natural gas prices also jumped because it was cold in many parts of the country and home heating was important and that pushed up the price of natural gas. So that also contributed. But the cost of we buckle up. I mean, this is not going away. The data center phenomena is just in early innings. And so we're going to see a lot of demand from these AI data centers and that's going to juice up electricity price. Of course, the power companies, you know, they know all this and they're working hard to bring on new capacity. So, you know, I suspect a year or two, three down the road this will abate. But for the next year or so, I think we should all, you know, just be prepared for higher electricity prices.

[B]

So we've got a higher electricity prices, we should expect them to go up because I mean, this AI train isn't, isn't stopping anytime soon. We've got 3% inflation based on the adjustments that you've made for what we didn't see in October. Fed's target is 2%. Meanwhile, there is now a criminal investigation into the Federal Reserve about a building. But most people agree this is really about reducing interest rates even further. What do you make of what happened this week between Trump and Powell and what does this mean for inflation going forward?

[F]

None of it's good. I don't see any upside here. It's all downside, all shades of gray and darkness. We know that a cornerstone of a well functioning market economy like our own is a independent central bank and independent Fed. We know this from history, I mean our own history. We can see here on the Nixon tapes the conversations between President Nixon back in the early 70s and his friend who was chair of the Federal Reserve, Arthur Burns at the time. And they kept rates lower than they would have otherwise in an effort to juice up the economy in the lead up to the 1972 election. And by so doing, they laid the stage for the inflation that followed. And it was a terrible period of hyperinflation that ultimately ended in Paul Volcker coming in, slamming the economy with higher interest rates and pushing the economy into a deep recession. There's a lot of other factors involved in that inflation in that very dark time. But one key factor was the loss of Fed independence. And we have experience overseas as well, other countries like Argentina, Turkey, even the British. The UK Only until recently, the bank of England was not independent. And you could see it in their inflation statistics. Their inflation numbers are higher. So that's the outcome of a Fed or a central bank that loses independence. The predisposition is going to be of the executive branches to keep rates low, to try to keep the economy moving and strong, leading into an election and overdoing it. And the result will be inflation. So that's kind of the direction of travel here. And so why this is such a disconcerting thing. And hopefully the Fed can maintain some semblance of independence going forward.

[B]

Do you think it will? I mean, I think one thing that has been interesting has been the market's reaction, where we haven't seen that much of a reaction. And we were having this debate in our episode yesterday about why that is. Maybe it's because we've kind of seen the strength of the Fed in Jerome Powell's video. Maybe it means that the Fed truly is independent, maybe because the investigation isn't that serious, maybe because the markets just don't seem to care anymore. It's some sort of taco effect. But does it genuinely worry you from an inflation perspective? Do you think that realistically this will actually lead to worse inflation, given what has happened in the past 48 hours?

[F]

No, not yet. I think that's why investors are still kind of sitting on their hands waiting to see, because there's a lot of things that are going to transpire here in the next few weeks, few months. One, obviously, is the President's going to nominate a new chair to the Federal Reserve Chair. Powell. His term is up as chair in May. Who's that person? We need to know that there's a Lisa Cook case. Lisa Cook is on the board. You know, she's been charged with mortgage fraud. President has tried to fire her. She sued, saying, you can't do that. So that's now in front of the Supreme Court.

[B]

That's a.

[F]

That's a huge decision. If the Supreme Court says that what the President did is okay, and then he's going to fire lots of folks and presumably. And we're going to see you know, a change Fed pretty fast. But let's see what the Supreme Court does. You know, if you listen to the kind of the back and forth. When they were adjudicating this a couple months ago, it sounded like the Supreme Court was going to figure out a way to not allow the President to do that. But we'll just see. We'll see what Chair Powell does. I mean, he will roll off his Fed chair in May, but his term as a Fed member doesn't end, I think, until the end of 2027. So he could stay. Let's see what he does. So I think investors are saying, let's see how this plays out here. Let's see. And I do think at the end of the day, if the Fed does start, it feels like the Fed is Los Independence and is setting policy based on politics and not what's good for the economy. Bond investors will ultimately say, enough already. And you will see long term interest rates rise. And that would be a problem, I think, for the economy.

[B]

All right, Mark Zandi, chief economist at Moody's Analytics. Mark, always love having you. Thank you.

[F]

Thanks, Ed. I really appreciate the opportunity. Take care now.

[B]

Another month, another inflation report, and for the second time, the numbers are wrong. Now, if you listen to the show a lot, you know that I hate when people make this argument. When the data comes out and someone on the left or the right says, no, no, you can't trust the number. The number's wrong because the people who report those numbers, the people at the bls, they're lying. I hate this argument because it is a lazy argument and it's almost never true. The people at the BLS are not lying. As we've discussed before, if there's any reason why the numbers are wrong, it's that there was an actual data problem. Some irregularity in the survey, some problem in the reporting that made the numbers flawed. And if that is the case, well, it's important then that you show me your evidence. Show me why you believe in this very bold claim that the US Government's data is incorrect. In other words, this is no small statement. And yet in this case, it is actually true. And it all goes back once again to that stupid month of October when the government shut down all of its operations, including its ability to go out and measure prices, which means they literally didn't collect the data. And more importantly, they didn't adjust for that data. Instead, they simply assumed, as Mark told us, that prices just remained the same, probably because it was the least political assumption they could make. But we all know, of course, that isn't true. Prices always change. And this is a real problem because it didn't just affect the October report. It also affects multiple reports after that. The October numbers impact the November numbers, which impact the December numbers, and so on and so forth. And then the question becomes, at what point is the data going to be correct? And the answer appears to be, according to Mark, next year, next October. But the more important point stands, and that is prices didn't rise 2.7% year over year, which, by the way, is already very high. There is a downward bias in the data, which means that prices rose more than that. And this is where third party data is really helpful. And thankfully, we have it right here in front of us, courtesy of Mark. The true number is 3% year over year. In other words, before Liberation Day, before the tariffs, we had 2.3% inflation. After liberation Day, after the tariffs, we now have 3% inflation. There is no question what tariffs have done to prices in America. Prices have gone up and they have gone up a lot. The President will try to say the opposite has happened. In fact, that's the claim he made yesterday morning. But you can either investigate these numbers in detail, as we have just done, as Mark has done, or you can simply go to the grocery store. Either way, you will conclude inflation is only getting worse. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Patterson and engineered by Benjamin Spencer. Our research team is Daniel Shalon, Isabella Kinsel, Kristen o' Donoghue and Mia Silverio. Thank you for listening to Profg Markets from Profg Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.