America is about to run up on the anniversary of the first votes being cast in the 2024 election, a contest in which lingering ire over high inflation scuppered Kamala Harris’ chances.
A year on, incredibly enough, inflation is just a tick higher than it was at the same point last year, and still close to a percentage point above the Federal Reserve’s target rate. Worryingly, it does not appear likely to fall. A new poll shows that 47 percent of Americans—including 34 percent of Republicans—say groceries are harder to afford than this time last year. Another has 75 percent of respondents saying the Trump administration's focus on lowering prices is "not enough," with 51 percent saying Trump's policies are making them financially "worse off."
That means that while in 2024, inflation was Democrats’ political problem, this year it is Republicans —and it will be next year, too, if numbers don’t come down by, say, December.
Axios recently quoted a GOP operative fretting “Democrats making campaign ads about $8 Lucky Charms,” and cited “a conservative group aligned with congressional GOP leadership… distributing polling data to Hill Republicans that shows 25 percent of voters view inflation as the most important issue facing the country”—over twice as many as those citing the next-highest issue on the proverbial triage list.
Tempting as it is to quip that Americans might not be able to buy Lucky Charms by the time we get to next November thanks to the big government overreach of Robert F. Kennedy, Jr., this is a real problem. Those numbers being circulated by the conservative group might actually be a bit soft; Economist/YouGov data showed the same focus on inflation, but also indicated that only about a third of voters approve of Trump’s handling of the problem.
And here’s the real rub: The actual numbers are unlikely to improve much because they are a result of policy that has been deliberately pursued, to a large degree single-handedly (and one might say single-mindedly) by Trump, but also in part by non-political government actors, and indeed Congress itself.
Some tariffs instituted by Trump may have been nixed by the federal judiciary, but the President’s preferred “fair trade” not “free trade” policies have undoubtedly already contributed to higher-than-desired inflation (it took a few months for them to get us there, but they have, in the end).
Trump has been pressuring the Federal Reserve hard to cut interest rates, and it looks like the Fed will, due to concerns about the job market softening. That could drive inflation numbers up, too, if the cuts are too much, too fast.
But of course, not everything is down to Trump or Jerome Powell—as much as Democrats would have us believe the former and Trump would have us believe the latter.
While Trump certainly pushed for the “One Big, Beautiful Bill”—which Trump now wants to rename the "Working Families Tax Cut Bill" or the "Working Families Tax Plan"—he didn’t write it. Republicans in Congress did. There are plenty of economic conservatives who backed the bill, but rightly concede that it does entail pumping more money into the economy, and will expand the debt and deficit. That is on Congress, not Trump.
The final bill did not reflect his priorities in a range of areas, whether it was clean energy tax credits or an absolute prohibition on taxing Social Security income. It’s likely Trump would have preferred less in the vein of “Medicaid reform” or “Medicaid cuts,” much like Sen. Josh Hawley who oftentimes appears to function as the designated taste-test administrator for Trumpy policy ideas within the US Senate.
But this of course all reminds that at least two of these items—clean energy tax credits, and no tweaks to Medicaid—are policies Democrats would also happily back that both add to the debt and deficit and pump money into the economy, thereby stimulating inflation.
And then we have funny little legislative, regulatory, and general policy items that are less discussed, but which will also contribute to higher prices in other ways.
A big one is across-the-board support for more AI capability here at home, and more big data centers, coupled with insufficient new electricity generation. This is already causing electric bills to rise for consumers, and if the BBB had been written differently, it might be less of a concern. At least in this category, though, Trump seems to be doing things that could help a lot, having issued a very pro-nuclear energy executive order in May. (Nuclear is the most plausible route towards generating the huge volume of electricity needed to enable the sort of AI innovation and dominance the President is aiming for).
An interesting one is the FY2025 National Defense Authorization Act, which requires a formal national security assessment of Chinese-made drones, like those produced by drone titan DJI. That review has not yet begun, which means that in a couple of months, those drones could be banned. That matters not because Americans buy as many drones as vegetables (the price of which is currently up forty percent), but because Chinese-made drones are generally cheaper and better than US-made ones, at least according to US law enforcement agencies who buy a lot of them. If your local sheriff’s department has to trade its current DJI drones for more expensive US models in a few months—which will probably mean higher local tax bills—thank Congress for writing the law, and the administration for not having done the review.
In some cases, these problems are easily solved. For example, Tulsi Gabbard could order the drone security review at any minute. Trump could start ignoring the exhortations of Peter Navarro, Jamieson Greer and Howard Lutnick on tariffs and listen much more to, say, his Treasury Secretary.
But the Federal Reserve is immune from political interference. And the BBB, misunderstood and maligned though much of it is, is the law of the land. So, gold prices are up as investors try to hedge inflation—and Republicans are furiously trying to redistrict their way out of political peril.
Ultimately, it is probably better to enter an election with inflation hovering around three percent and a softening job market than to run with inflation having exceeded 7.5 percent at any point in the eighteen months leading up to an election. Numerous contests in recent years suggest this.
But the Trump administration and Republicans in Congress would be smart to start thinking right now about how they can mitigate inflation, and not merely mask it, or continue to spur it with quasi-rebates designed to make it hurt less but which will effectively keep propelling it.
Trump’s ability to avoid impeachment for a third time might just be riding on it, and God knows Speaker Johnson’s tenure is—even though there’s nothing to suggest that Democrats retaking the House and/or the Senate would improve the inflation picture.
Liz Mair is a dual US-UK citizen, and President of Mair Strategies LLC, where she has advised UK Conservative Party figures and candidates for major office in the US on communications.
