High inflation is largely not Biden’s or Trump’s fault, economists say

Inflation decelerated again in June, bringing further relief to consumers’ wallets.

The consumer price index rose 3% in June 2024 from June 2023, down from a 3.3% annual inflation rate in May, the Bureau of Labor Statistics reported Thursday.

While inflation isn’t quite yet back to policymakers’ long-term target around 2%, it has cooled significantly from about 9% two years ago, the highest level since 1981.

But why did inflation initially take off?

The first U.S. presidential debate last month saw both candidates — President Joe Biden and former President Donald Trump — blame each other for inflation-related grievances during the pandemic era.

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“He caused the inflation,” Trump said of Biden during the June 27 debate. “I gave him a country with no, essentially no inflation,” he added.

Biden countered by saying inflation was low during Trump’s term because the economy “was flat on its back.”

“He decimated the economy, absolutely decimated the economy,” Biden said.

But the cause of inflation isn’t so black and white, economists say.

In fact, Biden and Trump are not responsible for much of the inflation consumers have experienced in recent years, they said.

Global events beyond Trump’s or Biden’s control wreaked havoc on supply and demand dynamics in the U.S. economy, fueling higher prices, economists said.

There were other factors, too.

The Federal Reserve, which acts independently from the Oval Office, was slow to act to contain hot inflation, for example. Some Biden and Trump policies such as pandemic relief packages also likely played a role, as might have so-called greedflation.

“I don’t think it’s a simple yes/no kind of answer,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, a left-leaning think tank.

“In general, presidents get more credit and blame for the economy than they deserve,” he said.

That Biden is seen as stoking high inflation is due somewhat to optics: he took office in early 2021, around the time inflation spiked notably, economists said.

Likewise, the Covid-19 pandemic plunged the U.S. into a severe recession during Trump’s tenure, pulling the consumer price index to near zero in spring 2020 as unemployment ballooned and consumers cut spending.

“In my view, neither Trump nor Biden is to blame for the high inflation,” said Mark Zandi, chief economist at Moody’s Analytics. “The blame goes to the pandemic and the Russian war in Ukraine.”