President’s Focus on Lower Prices May Raise Consumer Expectations for Price Cuts
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Navigating Washington: Insights for Business

President’s Focus on Lower Prices May Raise Consumer Expectations for Price Cuts

/ Essay

One of the executive orders (EOs) that the new administration issued during its first couple of days in office directs federal agencies to review how their policies could be changed to reduce consumer prices. It mentions product/service categories that are among US consumers’ main expenses, including housing, food, energy, and health care—all essential categories. Cost cutting could include loosening regulations for new housing to expand supply, cutting administrative expenses to lower health care cost, and removing climate-friendly regulations that inflate the cost of energy, food, and more.

Key Insights

One of the executive orders (EOs) that the new administration issued during its first couple of days in office directs federal agencies to review how their policies could be changed to reduce consumer prices. It mentions product/service categories that are among US consumers’ main expenses, including housing, food, energy, and health care—all essential categories. Cost cutting could include loosening regulations for new housing to expand supply, cutting administrative expenses to lower health care cost, and removing climate-friendly regulations that inflate the cost of energy, food, and more.

Key Insights

  • This specific EO on reducing prices is aimed at federal agencies, highlighting for the public that prices are influenced by public policy and thus potentially tempering recent criticism of companies’ pricing practices. It contrasts with an alternative proposal on the campaign trail, namely that of banning corporate price gouging to keep prices in check (analyses find that corporate profiteering didn’t drive inflation). Our research shows that three-quarters of US consumers want the government to take action on prices (see graphic). This EO delivers on exactly that, as do other EOs that specifically aim to reduce the price of energy, including one that declares a national energy emergency to authorize the government to better leverage domestic energy resources, and another that allows drilling in Alaska. Moreover, the new administration has called on the Organization of the Petroleum Exporting Countries (OPEC) to lower oil prices
  • The president’s spotlight on lowering prices could raise consumer expectations for broader-based corporate price cuts—beyond the categories mentioned in the EO on reducing prices. It could exacerbate consumers’ perceptions of high prices and intensify their desire for lower price tags—regardless of whether the government or companies drive the price cuts. This may place additional pressure on companies, especially those that wouldn’t benefit from federal agencies’ policy revisions. After all, higher prices are by far US consumers’ number one concern for 2025 (67%), ahead of higher taxes (41%), while lower prices (59%) and the ability to save more money (45%) are their top two hopes, according to our research. We also found the price of goods/services is the clearly leading driver of customer dissatisfaction, ahead of data privacy and customer service quality.

US consumers want governmental action to lower high prices

Additional Implications for Companies

  • If governmental efforts succeed in lowering prices, companies might benefit from increasing consumer spending power and satisfaction. The government initiatives address elevated prices, which has been US consumers’ top persistent pain point since mid-2020. While inflation gradually declined from its June 2022 peak of 9.1% to 2.9% in December 2024, prices remain at an elevated level (when people hear inflation is decreasing, they often misinterpret it as a sign that prices are also decreasi

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