Continuous inflation a the above problem ahead of 2024 presidential election – in a CBS News poll in mid-August, 76% of registered voters said it was a major factor in choosing the president – and they wanted to know how the nominee would fare. Donald Trump and Kamala Harris will solve it.
Inflation – the rate of increase in the price of goods and services over time – has hollowed out many voters’ wallets and made it difficult for Americans to save. According to the Federal Reserve, inflation averaged 1.9% per year from 2017 to 2021 during Trump’s presidency.
Although inflation has recently cooled to a three years less than 2.5%is on track to average 5% per year during the Biden administration.
Today, America is home shopping must have annual income from $106,500 to afford a typical home in the US, increase clearly over $59,000 they will be needed when Trump becomes president, thanks again to home prices and high interest rates.
Grocery prices also rose during Mr. Biden’s first three years in office, rising 20% ​​during that time.
Inflation is also a political challenge, because once prices rise, they rarely fall again. The International Monetary Fund explains, “Although high inflation harms the economy, deflationor falling prices, is also not desirable. When prices fall, consumers delay purchases if possible, anticipating lower prices in the future.
The Federal Reserve, which sets monetary policy, has tried to give the nation a “soft landing kab. The target inflation rate is 2%.
Trump blamed the Biden administration for high inflation, demanding during debate with Harris, “We have inflation like very few people have ever seen before. Probably the worst in the history of our nation.” But while it will reach a 40-year high of 8% in 2022, in modern times, inflation will reach 13.5% in 1980.
Trump has said that he wants a more direct role in how the Federal Reserve sets interest rates, telling reporters in August, “I think the president should at least have (a) say there. I think that in my case, I made a lot of money, I was successful very, and I have better instincts than in many cases, the people who will be the Federal Reserve or the chairman.
But he also told Bloomberg in an interview that he would not fire Fed Chairman Jerome Powell before his term ends in 2026.
Two years ago, Congress passed and President Biden signed the Inflation Reduction Act, a sweeping piece of legislation aimed at reducing drug prices and encouraging investment in climate and domestic energy. Republicans say the law isn’t what’s helping to reduce inflation, and they claim the Biden administration’s spending spree injected into the economy has had the opposite effect.
The Biden administration has tackled the effects of inflation, recognized the cost of basic necessities like housing, groceries and medicine and has worked to reduce some of America’s financial burdens. Harris’s economic plan, though broad, suggests he will continue and expand this approach.
Harris said they will help first-time home buyers and deal with rising prices
Harris proposed addressing higher prices at grocery stores by attacking what he said were the high prices of large grocery companies. Harris said he wants to target businesses that don’t “play by the rules” and ensure there is competition in the industry to keep costs down.
The economist said The reasons behind higher prices in grocery stores are more complex than wholesalers trying to maximize profits. They point to supply chain disruptions and higher labor costs, and other factors — such as low cow numbers — have weighed on beef prices.
Wage gains have outstripped inflation since May 2023, even though many voters say they don’t feel it, or at least that’s how it feels. not the truth. Inflation has become a worldwide phenomenon, partly due to the pandemic’s impact on global supply chains.
Harris also proposed addressing higher prices with offers of up to $25,000 in assistance for many first-time home buyers.
But Edward Pinto, co-director of the conservative-leaning American Enterprise Institute, told CBS News that down payment assistance will help some home buyers immediately, a move that will raise prices in census tracts where a sizable portion of buyers receive assistance. When the Obama administration lowered Federal Housing Administration mortgage insurance premiums, a study by AEI found that about 20% of homebuyers in the census tract were FHA buyers, home prices increased by an average of 4%. Pinto expects the effect to be even greater with $25,000 in government down payment assistance.
“We’re still working on the numbers, but I think we can say at least about 5% of home prices in the census tract where a large portion of people” — about 22% — “get this first-time buyer tax credit,” Pinto said.
Trump’s rate
Trump has consistently criticized the Biden-Harris administration for its high inflation, but Trump himself has offered several proposals to lower prices.
He said he wanted to impose tariffs of 60% on Chinese imports and 10% to 20% on goods from other foreign countries, although campaign spokeswoman Karoline Leavitt later said that what was reported was wrong, and that Trump “did not establish a definitive number for wrong one specific rate.
“I have tariffs, but I don’t have inflation,” Trump said during a debate in Philadelphia. “Look, we have a bad economy because inflation – which is really known as the country-buster – breaks up the country.”
Tariff increases of up to 60% on Chinese imports and 10 to 20% on all other foreign imports would cost middle-class families between $1,500 and $2,500 more a year, according to estimates by the Center for American Progress and the Peterson Institute for International Economics.
Predicting inflation under a Trump or Harris presidency
In August, Moody’s Analytics released a report on the macroeconomic impact of a Trump or Harris victory. Earlier this year, Mark Zandi, chief economist at Moody’s Analytics, told CBS MoneyWatch at the time that if consumers are “upset now, they will be hopping mad years from now” about inflation if Trump wins and enacts his policies.
Moody’s estimates that the election of Republicans in Congress and the White House will increase the annual inflation rate to 3.5% in 2025, a slight acceleration from 3%. Under Harris and a divided Congress – because the House will not return to Democratic control – Moody’s inflation forecast will drop to 2% in the summer of 2025.
contributed to this report.