State of the Union 2026: What It Means for Your Money

Key Takeaways

• In his State of the Union speech, President Donald Trump defended his economic policies, saying his controversial tariffs were responsible for an economic “turnaround for the ages.”
• Trump said he would make tech companies build power plants for their massive data centers, shielding consumers from rising electricity costs.
• Starting next year, workers without access to employer-match 401k retirement plans can participate in the same plan offered to federal workers with a $1,000 match from the government.

If you don’t have an hour and 47 minutes to listen to President Donald Trump’s record-long State of the Union address, here are the key takeaways for the economy.

Trump addressed a joint session of Congress Tuesday night and defended his increasingly unpopular economic policies. He said affordability problems were “a dirty, rotten lie” by Democratic politicians and that the economy had a “turnaround for the ages” under his leadership. He also introduced several new policies aimed at helping household finances. The speech was the longest since at least 1964, according to CNN.

“The roaring economy is roaring like never before,” he said.

Tariffs Are Actually Good

Trump spent a good deal of his speech defending his signature economic policy. The widespread tariffs he imposed last year are unpopular with the public, with 64% of U.S. adults disapproving of them in a recent ABC/Washington Post/Ipsos poll. And economists say they have pushed up prices for many products as importers pass the cost of the tariffs on to consumers.

Trump said his tariffs are the key to the country’s economic success, adding that he has used them to secure trade deals, end foreign wars, and that they would even one day replace income taxes, “taking a great financial burden off the people that I love.”

Trump criticized the Supreme Court for overturning many of his tariffs last week, but said they would continue under different legal justifications.

Everything Bad About The Economy Is Biden’s Fault

Trump repeatedly blamed the post-pandemic surge of inflation on his predecessor, former president Joe Biden, and took credit for bringing inflation below its 2022 peak.

“The Biden administration and its allies in Congress gave us the worst inflation in the history of our country,” he said. “But in 12 months, my administration has driven core inflation down to the lowest level in more than five years.”

By the most influential measure, however, core inflation, which excludes volatile prices for food and energy, is higher than when Trump took office. The rise in the Personal Consumption Expenditures price index over 12 months was 2.9% in December, up from 2.7% in January 2025.

The Tech Industry Should Build Its Own Power Plants

In one of a handful of new policy announcements, Trump said he was going to make technology companies build generators to provide electricity to their power-hungry data centers rather than allowing them to rely on the existing electrical grid. The program is aimed at offsetting the recent surge in household electricity prices linked to the AI boom.

“We’re telling the major tech companies that they have the obligation to provide for their own power needs,” he said. “They can build their own power plants as part of their factory, so that no one’s prices will go up, and in many cases prices of electricity will go down for the community.”

Trump’s Plan For Affordable Housing

Trump said he would not try to decrease the price of homes, but would rather focus on making housing affordable by lowering interest rates.

“Low interest rates will solve the Biden-created housing problem, while at the same time protecting the values of those people who already own a house that really feel rich for the first time in their lives,” he said. “We want to protect those values.”

What This Means For The Economy

Trump didn’t introduce any major economic policies in his speech. Instead, he focused on defending the tariffs that have proven unpopular with both economists and the public.

Mortgage rates have fallen during Trump’s presidency. Lenders charged an average of 6.01% last week for a 30-year fixed-rate mortgage, down from 6.96% the week Trump took office, according to Freddie Mac. That has had a significant effect on housing affordability. Under today’s rates, a homeowner would pay about $3,000 a year less on their monthly bills than than under last year’s rates, according to an estimate from Jake Krimmel, senior economist at Realtor.com. (Trump said the figure was $5,000.)

Related Education

Maximize Your 401(k) Savings: Understanding Employer Matching

How the Federal Reserve Affects Mortgage Rates

Trump has repeatedly pushed the Federal Reserve to sharply cut interest rates. The Fed funds rate is not directly tied to mortgage rates but it does influence them. The Fed has cut rates by far less than Trump has demanded, and economists say steep rate cuts could backfire and push up borrowing costs.

He also asked Congress to pass a law banning large investors from buying single-family homes, under the theory that corporations are outbidding individuals and pushing up prices.

Federal Worker Retirement Plans For Everyone

Trump said he would allow every worker whose employer does not offer a retirement plan with matching contributions to participate in the same retirement plan that’s offered to federal employees.

“Next year, my administration will give these often forgotten American workers—great people, the people that built our country—access to the same type of retirement plan offered to every federal worker,” he said. “We will match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market.”

Do you have a news tip for Investopedia reporters? Please email us at

[email protected]