The 2024 election served, in part, as a judgment on inflation. Voters were frustrated with increasing prices and directed their anger toward the Democrats.

Was this criticism justified?

The YSL News reached out to economists to understand who bears responsibility for the significant inflation that peaked at a 40-year high in mid-2022. Although inflation has eased to an annual rate of 2.6% as of October, prices remain elevated—approximately 21.4% higher since February 2020, based on data from personal finance site Bankrate.

According to exit polls, inflation played a crucial role in Donald Trump’s electoral success. More than two-thirds of voters believed the economy was doing poorly, as reported by an ABC News exit poll. A CBS News exit poll indicated that three-quarters of voters viewed inflation as a significant difficulty.

Mark Zandi, chief economist at Moody’s Analytics, commented, “Most Americans haven’t really felt significant inflation until now; this was their first encounter, and it was quite severe.”

So, is the Biden and Harris administration at fault?

Economists mostly agree they are, but only partially. Out of the seven economists interviewed by YSL News, the majority pointed to the global pandemic as the main driver of the inflation crisis rather than Biden himself.

‘We Were in a Dire Situation’

The pandemic initiated a short-lived recession, subsequently followed by waves of global inflation. Both the Trump and Biden administrations reacted to the economic downturn with various stimulus efforts, sending financial assistance directly to American households. The Federal Reserve also reduced interest rates and injected liquidity into the economy. Economists noted that the goal was to prevent a repeat of the 2008 Great Recession, which severely affected the U.S. economy for years.

Ryan Sweet, chief U.S. economist at Oxford Economics, expressed concern: “We were in a dire situation; it felt like we were staring into an abyss. At that moment, proceeding with this approach seemed right.”

Biden and the Federal Reserve effectively revived the economy after the downturn, with the job market quickly rebounding.

However, economists indicated that these stimulus measures also contributed to rising inflation, which ultimately hurt the Democrats’ chances in elections.

Ryan Bourne, an economist at the Cato Institute, said, “I believe they expected the public would appreciate a swift recovery in terms of job opportunities more than they would criticize them for rising inflation. That turned out to be a significant miscalculation.”

Still, the economists consulted by YSL News identified the pandemic as the leading factor behind the notable price increases, asserting that inflation would have occurred regardless of who was in office.

“There are numerous reasons for the significant inflation,” Zandi explained. “The policies of the Biden-Harris administration are at the very bottom of that list.”

The pandemic sparked classic global inflation

The pandemic caused widespread shutdowns of the global economy in 2020. When the world began reopening, consumers encountered shortages of many products. The demand began to exceed supply, which is the traditional recipe for inflation.

“The COVID shutdowns resulted in the most dramatic economic downturn in modern history,” stated Joshua Gotbaum, a scholar at the Brookings Institution. “This was followed by the highest inflation rates we’ve seen in 40 years.”

In March 2021, President Biden enacted a $1.9 trillion stimulus package, which included payments of up to $1,400 for Americans affected by the pandemic. Prior to this, the Trump administration had issued two rounds of stimulus checks, in March and December of 2020.

Some economists criticized Biden, claiming that the third stimulus payment was not needed, too large, and potentially harmful to the economy’s recovery. Many economists today support this view.

“There was no need for it,” remarked Douglas Holtz-Eakin, president of the American Action Forum, a center-right organization. “The scale was excessive, and negative outcomes were bound to occur, which they did.”

Holtz-Eakin was among those who opposed the relief bill at the time.

Collectively, the stimulus bills from both Trump and Biden accounted for nearly 20% of the country’s GDP, as explained by Desmond Lachman, a fellow at the American Enterprise Institute, which leans right. “This represents the largest fiscal stimulus we have experienced during peacetime, and is a significant factor in the situation we face now.”

Conversely, some economists downplay Biden’s stimulus package as a contributor to the rising consumer prices.

“The Biden/Harris administration is not primarily responsible for the inflation,” stated Jeffrey Frankel, an economist at Harvard University. “The main responsibility lies with the supply chain issues that arose as the economy reopened from COVID, as well as the spike in commodity prices due to Russia’s invasion of Ukraine.”

Frankel pointed out that Vice President Harris, as Biden’s deputy, bears even less responsibility for the stimulus measures than Biden does.

The Ukraine invasion provided a new impetus for inflation

In February 2022, Russia launched an invasion of Ukraine, a development most economists, including Frankel, view as a significant factor contributing to the surge in consumer prices.

The annual inflation rate had remained below 3% for several years until the pandemic began. Inflation was at 1.7% in February 2021, just prior to Biden’s stimulus package. By mid-2021, as the global supply chain struggled, inflation exceeded 5% for the first time in over ten years. By December of that year, it reached 7%.

In March 2022, inflation spiked to 8.5%, coinciding with the Ukraine invasion. Gas prices surged beyond $4 per gallon.

The invasion “sent shockwaves through the commodities markets,” remarked Sweet. “This provided another boost to inflation.”

March 2022: Federal Reserve Steps In

In March 2022, the Federal Reserve reacted to the heated economy by increasing interest rates. The federal funds rate had essentially remained at zero since the pandemic began.

From March 2022 through July 2023, the central bank raised rates more than five percentage points, reaching over 5% in a robust effort to control inflation.

Most economists believe that while the response wasn’t too little, it was indeed too late.

Jerome Powell, the Fed’s chair, “should have responded to the economic situation by raising interest rates much earlier than he did,” asserted Lachman.

Economists emphasized that the Federal Reserve operates independently, indicating that consumers should not hold Biden or Harris accountable for the Fed’s approach to tackling the inflation crisis.

A Brookings Institution report highlighted that in 2020, the Fed bought a large volume of debt securities in reaction to the pandemic, which increased the money supply. This action contributed to soaring inflation, according to the economists.

The rise in prices was sparked by both the pandemic and the conflict in Ukraine. Bourne mentioned that as the pandemic subsided and the global economy adapted to the ongoing war, “those prices should have come back down.” He attributed the ongoing, significant inflation to excessive macroeconomic stimulus.

Bourne referred to the combined impacts of Biden’s stimulus payments along with the Fed’s actions regarding interest rates and the money supply.

“I don’t assign all the blame to the Biden administration,” Bourne stated. “However, it’s clear that the Biden administration didn’t improve the situation.”

Inflation is Decreasing, but Prices are Still Elevated

Inflation has slowly decreased, with the annual rate nearing the Fed’s target of 2%. Nonetheless, persistent high prices continue to affect consumers.

“Americans can provide exact numbers on current gas, bread, and egg prices compared to those from four years or eight years ago,” stated Sweet. “Typically, American consumers have short memories, except when it comes to prices.”

According to Gotbaum, an economist from Brookings, both the Republicans and Democrats have lost the presidency in 2020 and 2024, largely due to the pandemic and its economic consequences.

During a recent press briefing, Powell, the head of the Fed, recognized public dissatisfaction with persistent inflation and its potential electoral repercussions.

“We state that the economy is doing well, and it indeed is,” Powell explained. “However, we acknowledge that people still feel the impact of high prices And, we don’t dictate how individuals should perceive the economy.”