The Baltimore-Towson-Columbia metropolitan region ranked worst in the nation for inflation problems, according to a new WalletHub report.
The region also ranked second-worst in Consumer Price Index (CPI) Change, which compares the latest month to two months before it, the report found.
According to WalletHub’s “Changes in Inflation by City” report, the year-over-year inflation rate sits at 2.4% as of March 2025, which is still above the target rate of 2%. WalletHub cited the war in Ukraine, labor shortages, ongoing recovery from supply chain disruptions due to the COVID-19 pandemic, and the trade war sparked by tariffs imposed by President Donald Trump as reasons for the higher-than-average inflation.
With stock market uncertainty resulting from the Trump administration’s tariff battles waged on most of our global trading partners, and prices of groceries and other household items continuing to rise, the entire nation is feeling the economic downturn.
When Maryland is considered, however, WalletHub’s ranking is not a surprise. Maryland has the highest proportion of federal workers (7.3%) outside of Washington, D.C. (13.2%), and the second-largest total number of federal workers (224,229) behind Virginia (234,242).
Mass layoffs of hundreds of thousands of federal workers by Elon Musk-led “Department of Government Efficiency,” or “DOGE,” has almost certainly impacted Maryland’s CPI in the short term. Add the impact of last year’s tragic collapse of the Francis Scott Key Bridge, and the local economy was bound to experience significant decline over the course of the last year.
Baltimore City Comptroller Bill Henry was unsurprised by the report.
“Thank you to WalletHub for confirming so many Baltimoreans’ feelings that the sticker shock we’ve become accustomed to really is worse here than anywhere else,” Henry told Fishbowl in an email.
To determine which cities were most impacted, WalletHub compared 23 major Metropolitan Statistical Areas (MSAs) using two key metrics related to the Consumer Price Index, which measures inflation. They compared the Consumer Price Index for the latest month for which Bureau of Labor and Statistics (BLS) data is available to two months prior, and one year prior, to get a sense of how inflation has changed in the short and long terms.
WalletHub included the areas covering Baltimore, Columbia, and Towson in our MSA when calculating scores for the study. In the short term, over the two-month period, the MSA including Baltimore saw an increase of 1.50% in Consumer Price Index. In the long term, over the span of one year, the Consumer Price Index increased by 3.20%.
The MSA faring the best inflation-wise of the 23 cities analyzed in the study is the Dallas-Fort Worth-Arlington area, with a -0.40% decrease in Consumer Price Index over the short term and a 1.40% increase over the long term.
Henry sees questionable value in lists like these.
“While I can certainly understand why some might find WalletHub’s lists in this article interesting, they’re not particularly useful or relevant,” Henry wrote. “All of their own experts acknowledge that the pressures creating inflation (or perhaps stagflation in the near future) are the result of stimuli at the national and international level. There are no plausible strategies being offered for localities to reduce that impact, so what does it matter whether things are worse in California or Virginia? We’re all dealing with this issue.”
The government must be prudent in its actions regarding interest rates taxes, and tariffs, said Kwang Soo Cheong, an associate professor of economics and finance at the Johns Hopkins Carey Business School, and one of the experts included in the WalletHub report.
Trump’s tariffs are likely to lead to higher inflation rates in the months ahead, Cheong said. So don’t expect the Federal Reserve to cut interest rates anytime soon.
“Fed is not likely to easily yield to the market’s desire for interest rate cuts,” he said. “It is possible that the US economy will weaken as the government remains trapped in a policy dilemma.”
Raising interest rates could help cool inflation, but the government must be careful not to do so too drastically, Cheong said.
“[L]imiting money supply is supposed to have immediate effects for inflation control,” he said. “However, this policy has a tradeoff effect of causing reduced business activities, hence increasing unemployment, of which the relationship is called the Phillip Curve. If the rate increase is too excessive, the economy may fall into a recession as some economists are currently raising concerns about these days.”
