Why inflation helped swing the election in Trump’s favor, experts say

Rising stock market, low unemployment and reliable height – By almost all measures, the economy was poised to bring victory to Vice President Kamala Harris.

The exception, of course, was inflation, and it seems to have eclipsed other indicators. More than two-thirds of voters say the economy is in bad shape, according to preliminary polling results. ABC News exit poll

Inflation likely shaped voters’ negative perceptions of the economy and helped fuel anger toward the ruling party, as it did around the world after the pandemic triggered a wave of rapidly rising prices, experts told ABC News.

The political power of inflation stems from a visceral, recurring sense of unease caused by high prices, experts add. This feeling leaves voters uncertain about their future and desperately looking for a leader who can change the course of the country.

“Inflation has a particular power in elections,” Chris Jackson, senior vice president of U.S. communications for Ipsos, told ABC News. “This is what people see on their faces every day—every time they go to the grocery store or put gas in their car.”

He added: “Inflation is present in people’s lives. This is something they are unhappy about, and it is something they blame, rightly or wrongly, on whoever is in power.”

Pandemic go a severe bout of inflation that affected almost every country in the world when blockages in global supply chains caused an imbalance between the availability of goods and the demand for them. In other words, too much money was chasing too few products.

Prices in the US began to rise rapidly in 2021, causing inflation to soar. peak next year will be about 9%. Inflation soared even higher in many other countries, including Brazil and England, where leaders faced angry electorates.

In Brazil, where President Jair Bolsonaro cut taxes on fuel and electricity in an attempt to lower prices in the months leading up to elections ending in October 2022, the country has nonetheless replaced him with a left-wing rival.

Earlier that year in England, Prime Minister Liz Truss responded to the highest inflation in four decades with economic policies based on tax cuts and controls on energy prices. Her tenure lasted just 44 days before market reaction and political turmoil led to her resignation.

The post-pandemic picture has shown a high rate of leadership turnover amid inflationary crises around the world over the past half-century, according to research from Eurasia Group, a political risk consulting firm. Studying 57 inflation shocks since 1970, the firm found government budget turnover 58% of the time.

Additionally, when elections were held during or within two years of an inflation shock, they resulted in a change of government in about three out of every four cases, according to the Eurasia Group.

“We’re seeing this trend in jet fuel post-pandemic,” said Robert Kahn, managing director of global macrogeoeconomics at New York-based Eurasia Group. “The inflation shock pandemic is contributing to feelings of instability and people’s loss of trust in their governments.”

Carola Binder, an economics professor at the University of Texas at Austin who studies the history of U.S. inflation, characterized recent anti-incumbency sentiment a little differently: “When people experience inflation and suffer from it, they want to blame someone or something.”

Inflation has fallen sharply over the past two years and is now hovering near the Federal Reserve’s 2% target. However, this progress has not reversed the price surge that began during the pandemic. Since President Joe Biden took office in 2021, consumer prices have soared more than 20%.

The potential role of inflation in US elections is due to the typical lag between the point at which inflation declines and consumers acclimating to the new price level, since a lower inflation rate does not mean that prices have fallen, but rather that they have begun to rise at the same rate. at a slower pace, experts told ABC News.

“When inflation declines, prices for many critical goods remain high, especially for people who are overextended and living paycheck to paycheck,” Kahn said.

Consumers will likely adjust to current price levels in the coming months, but voters will remain sensitive to inflation, experts say.

President-elect Donald Trump’s proposals to raise tariffs and mass deportation of illegal immigrants risk sending prices soaring, some experts say. said.

When asked whether inflation could again become a major issue ahead of the next midterm elections in 2026, Jackson responded: “If the Republicans shoot themselves in the foot, then absolutely.”