Money Matters - Updated 2025 Changes in Inflation by City

With the year-over-year inflation rate at 2.7% in July, the personal-finance company WalletHub today released its updated report on the Changes in Inflation by City, as well as expert commentary.

To determine how inflation is impacting people in different cities, WalletHub compared 23 major MSAs (Metropolitan Statistical Areas) across two key metrics involving the Consumer Price Index, which measures inflation. We compared the Consumer Price Index for the latest month for which BLS data is available to two months prior and one year prior to get a snapshot of how inflation has changed in the short and long term.
 

Biggest Inflation Problem	Smallest Inflation Problem
1. Seattle, WA	19. San Francisco, CA
2. San Diego, CA	20. Anchorage, AK
3. Tampa, FL	21. Honolulu, HI
4. St. Louis, MO	22. Phoenix, AZ
5. New York, NY	23. Dallas, TX

To view the full report and your city’s rank, please visit: 
https://wallethub.com/edu/cities-inflation/107537



Expert Commentary

What can be done to continue to slow down inflation?

“The FED needs to maintain a credible monetary policy that is committed to further lowering inflation. This means that the federal funds rate, the rate at which commercial banks borrow and lend their excess reserves to each other overnight, needs to remain at the current target range of 5.25% to 5.5%. The Chairman of the FED has expressed concern about the recent hikes in tariffs recently implemented by the Trump administration, in addition to the potential materialization of prohibitively high increases that could be imposed on major trade partners such as China, Mexico, and Canada. The combination of lower interest rates could trigger a consumption boom in the economy that, in combination with higher tariffs, might compound a ‘perfect storm’ scenario in which inflation can get out of control. Imported food items like coffee, bananas, tropical fruits, imported avocados, orange juice from Brazil, and other off-season produce, meat, seafood, dairy products, wine, maple syrup, chocolate, and other imported packaged foods can experience substantial price increases, well above 10%, within the next few months.”
Dr. Jairo G Isaza-Castro, PhD – Associate Professor, Christian Brothers University


Is raising interest rates a good or bad solution to control inflation?

“Raising or maintaining high interest rates is probably the best tool that the FED could deploy under the current circumstances. Apart from increasing consumption, lowering interest rates, as President Trump has publicly expressed, could have another side effect: depreciating the value of the US dollar. As international investors anticipate higher inflation rates in the US, the demand for US-denominated assets will be less attractive. That means less demand for US dollars in international markets. That, in turn, will mean that US consumers will have to pay more dollars for all imported products, regardless of the tariffs that have to be paid with the new US trade regime.”
Dr. Jairo G Isaza-Castro, PhD – Associate Professor, Christian Brothers University


What does the current inflation rate tell us about the future of the economy?

“This indicates that interest rates will not be lowered within the next few months. This means that the cost of borrowing, including credit cards, consumption credit to buy a car, or the interest rate that new home buyers can secure for a mortgage, will remain high for now.”
Dr. Jairo G Isaza-Castro, PhD – Associate Professor, Christian Brothers University