The Dallas area is mostly on par with the national rate of inflation, if not a touch lower, according to a study from WalletHub. The study used the Consumer Price Index Change (CPI), which measures inflation by tracking the change in price for a market basket of goods and services over a given period. The lower the CPI, the lower the increase in prices. Analysts crunched the numbers, using the CPI over a year, and over the last two months, to rank the 23 largest metropolitan areas. The Dallas area ranked seventh for highest inflation.
“The Dallas metroplex seems to be on solid footing right now,” said WalletHub analyst Chip Lubo.
The inflation rate over the last year in Dallas was 2.8%, following the national trend. The inflation rate over the last two months was 1.7%. While this tracks under the goal set by the Federal Open Market Committee, which is 2%, it is the second highest in the nation. Chicago had the highest rate of inflation in the past year, and Houston had the lowest.
“That's not a terrible number,” said Lubo. “But it does indicate that there could be some shocks along the way, particularly in housing prices and in food prices.”
On Feb. 12, reports hit newsstands of an irregular and fast-paced increase in inflation. The heavily cited report from the Bureau of Labor Statistics showed a 3% year-over-year inflation rate. A target inflation rate above zero provides a buffer for the economy, allowing for price stability and reducing the overall risk of deflation.
The report comes after the Federal Reserve neglected to lower interest rates, keeping them between 4.25% and 4.5% after several cuts in the latter half of 2024. A high interest rate can curb inflation by making it more difficult for borrowers to make high-ticket purchases like homes and cars. The Federal Reserve was slated to cut interest rates four times in 2025 but has reduced the proposed cuts to two.
“Typically, raising interest rates should control inflation,” Pablo Troncoso, an economics professor at the University of Houston said in the WalletHub study. “With a higher interest rate, people save instead of consuming or borrowing, cooling the economy and reducing inflation pressure.”
Inflation reached a 40-year high in 2022, when the inflation rate was 9.1%. Since then, lowering costs has been a hot-button topic for lawmakers. Drastically improving the economy, in part by by cutting inflation, was a prominent campaign promise of President Donald Trump's leading up to the Nov. 5 election.
“When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time,” Trump told NBC earlier in 2025. “And I won an election based on that. We’re going to bring those prices way down.”
Since taking office, the president has issued a slew of controversial executive orders in the hopes of reducing federal spending and bolstering the economy. He failed to place a freeze on all federal funding and offered buyouts to all government employees. Pre-inauguration, Trump promised tariffs on imported goods, thereby promoting domestic production while also increasing the prices of all international goods. His tariffs have yet to go into effect, and it’s too early to witness the measurable effects of his economic policies.
“There are many ways to reduce the pressure on prices,” Tranosco said. “The new administration has decided to reduce government expenditure by creating the White House's Department of Government Efficiency, or DOGE, whose primary purpose is to reduce federal spending, which might reduce money supply and inflation pressure. At the same time, the new administration has also decided to start a tariff war with several countries that might impact consumers and firms who face higher imported goods prices.”
Trump has also called for lower interest rates, expressing disappointment with their stagnation. The president and Jerome Powell, the chairman of the Federal Reserve, have a contentious relationship. At the end of his first term, the president alluded to firing Powell after nominating him to the position in 2017.
“I have the right to do that or the right to remove him as chairman,” Trump said at a recent news conference. “He has, so far, made a lot of bad decisions, in my opinion.”
With or without interest rate cuts, Dallas’ economy has maintained as a business-friendly city while enjoying a not-too-high or too-low rate of inflation.
“I think for the most part Dallas is pretty stable,” Lubo said. “I think [you’re] going to ride a few short-term shocks for the next few months, but I think in the long run, Dallas is going to be OK.”
