Inflation is consistent Top Questions First 2024 Presidential Election A mid-August CBS News poll found that 76% of voters said it was a major factor in the presidential election, and they’re eager to see how the candidates respond. Donald Trump and Kamala Harris We’ll deal with that.
Inflation — the rate at which the prices of goods and services rise over time — is draining many voters’ wallets and making it harder for Americans to save. During Trump’s presidency, from 2017 to 2021, inflation averaged 1.9% per year, according to the Federal Reserve.
Inflation has fallen recently, but 2.5% – the lowest level in three yearsUnder the Biden administration, growth is expected to average 5% per year.
Americans buying homes today Must have annual income The average American needs $106,500 to comfortably buy a home. Rapid increase Rising home prices and interest rates mean the amount is far more than the $59,000 needed under Trump.
Food prices have also risen during Biden’s first three years in office, increasing by 20% during that period.
Inflation is also politically problematic because once prices rise, they rarely fall again. The International Monetary Fund explains that “while high inflation is bad for an economy, deflation, or falling prices, is also undesirable. When prices fall, consumers delay purchases as long as possible in anticipation of lower prices in the future.” This results in less economic activity and slower growth.
The Federal Reserve Board, which sets monetary policy, “Soft landing.” The target inflation rate is 2%.
President Trump blamed the Biden administration for high inflation. Discussion “Inflation is the worst most people have ever seen, possibly the worst in U.S. history,” Harris said, noting that inflation peaked at 13.5% in 1980 in the modern era, though it will reach a 40-year high of 8% in 2022.
Trump has said he wants a more direct role in setting interest rates at the Federal Reserve, telling reporters in August, “I believe the president should at least have a say. I’ve made a lot of money, I’ve been very successful, and I think I have better instincts than many of the people who become members and chairs of the Federal Reserve.”
But he also said in an interview with Bloomberg that he has no plans to fire Fed Chairman Jerome Powell before his term ends in 2026.
Two years ago, Congress passed and President Biden signed the Stop Inflation Act, a broad bill aimed at lowering drug prices and encouraging investment in climate and domestic energy. Republicans argue that the law didn’t help stop inflation, and that the government spending the Biden administration has pumped into the economy has had the opposite effect.
The Biden administration has been grappling with the effects of inflation, acknowledging the rising costs of key necessities like housing, groceries and medicines, and working to ease some of the financial burden on Americans. Harris’ economic plan, while broad, signals a continuation and expansion of that approach.
Harris says she will help first-time homebuyers and fight price gouging.
Harris has proposed addressing high grocery store prices by attacking price gouging practices by large grocers. She said she wants to target companies that aren’t “playing by the rules” and create competition in the industry to lower costs.
Economists say The reasons for higher grocery store prices are more complicated than just grocers trying to maximize profits: Other factors, including supply chain disruptions, rising labor costs and record low cattle populations, have been blamed for the rise in beef prices.
Wage growth has been outpacing inflation since May 2023, but many voters don’t feel that way, or It’s not their reality.Inflation has become a global phenomenon, due in part to the impact of the pandemic on global supply chains.
Harris also proposes tackling rising prices by offering up to $25,000 in assistance to many first-time homebuyers.
But Edward Pinto, co-director of the conservative American Enterprise Institute, told CBS News that while down-payment assistance would help some homebuyers immediately, it would likely raise prices in census tracts where a significant number of buyers received the assistance. When the Obama administration lowered Federal Housing Administration mortgage insurance rates, AEI research found that home prices rose an average of 4% in census tracts where about 20% of homebuyers were FHA buyers. Pinto expects the effect would be even greater with $25,000 in government down-payment assistance.
“We’re still crunching the numbers, but it’s safe to say that in census tracts where a significant number of people — about 22 percent — receive the first-time buyer tax credit, home prices will go up by at least 5 percent,” Pinto said.
Trump Tariffs
President Trump has consistently criticized the Biden-Harris administration for record-high inflation, but he himself has offered few proposals to lower prices.
Trump has said he wants to impose tariffs of 60% on Chinese imports and 10-20% on other foreign products, but campaign spokeswoman Carolyn Leavitt later said that was false and that Trump has “not set a hard number for any of the tariffs and has offered several different numbers.”
“We had tariffs, but we didn’t have inflation,” Trump said at a debate in Philadelphia. “Look, inflation is said to destroy the country, it divides the country, and that’s why the economy was in such a bad state.”
The Center for American Progress and the Peterson Institute for International Economics estimate that if tariffs on Chinese imports were raised to 60 percent and tariffs on other foreign imports were raised to 10-20 percent, middle-class families could pay an extra $1,500 to $2,500 a year.
Inflation forecast under President Trump or President Harris
Moody’s Analytics released a report in August on the macroeconomic impact of a Trump or Harris victory. Earlier this year, Moody’s Analytics chief economist Mark Zandi told CBS MoneyWatch at the time that if Trump wins and implements his policies, consumers “if they’re angry now, they’re going to be angry about inflation a year from now.”
Moody’s projects that if Republicans win election to Congress and the White House, annual inflation would rise to 3.5% in 2025, accelerating slightly from the current 3%. Under Harris and a divided Congress, with the House unlikely to return to Democratic control, Moody’s projects inflation would fall to 2% by the summer of 2025.
contributed to this report.
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