The 2024 election was, to some extent, a referendum on worth rise. Voters were mad about higher prices, and they vented their wrath on the Democrats.  

Was that fair? 

USA TODAY asked economists to ascribe blame for the historic run of worth rise, which reached a 40-year peak in mid-2022. worth rise has cooled since then, to an annual rate of 2.6% in October. But prices are higher for excellent: about 21.4% higher since February 2020, according to an analysis by the money management site Bankrate.  

Exit polls recommend worth rise loomed large in Donald Trump’s triumph at the polls. More than two-thirds of voters said the economy was in impoverished shape, an ABC information exit poll found. In a CBS information exit poll, three-quarters of voters said worth rise was a hardship.  

“Most Americans haven’t really experienced high worth rise,” said Mark Zandi, chief economist at Moody’s Analytics. “This was the first period they got a taste of it, and it was very, very bitter.” 

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But is the Joe Biden and Kamala Harris administration to blame?  

Yes, the economists said, but only to a degree. Of the seven economists who spoke to USA TODAY, most cited the global pandemic, not Biden, as the primary factor of the country’s worth rise crisis.

‘We were in a scary place’

The pandemic triggered a brief downturn, followed by a round of global worth rise. The Trump and Biden administrations both responded to the downturn with multiple rounds of stimulus aid, dispatching checks to American homes. The Federal safety net lowered gain rates and pumped money into the economy. Their collective aim, economists said, was to avoid a repeat of the Great downturn of 2008, which hobbled the U.S. economy for years.  

“We were in a scary place,” said Ryan Sweet, chief U.S. economist at Oxford Economics. “You’re benevolent of staring into the abyss. At the period, it seemed that was going to be the correct way.”  

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Biden and the Fed succeeded at pulling the economy out of the downturn. The job trade swiftly stabilized. 

But the stimulus also fed worth rise, the economists said, which ultimately helped sink the Democrats at the polls. 

“I ponder that they thought the community would reward them more for a quick recovery, in terms of jobs, than they would punish them for worth rise,” said Ryan Bourne, an economist at the Cato Institute, a libertarian ponder tank. “I ponder that proved a huge miscalculation.”  

Yet, most economists queried by USA TODAY listed the pandemic as the main rationale for the historic worth surge. worth rise, they said, would have happened no matter who was president.

“There’s a long list of reasons for the high worth rise,” Zandi said. “The Biden-Harris policies that are on the list are at the very bottom.” 

The pandemic delivered a classic formula for global worth rise

The pandemic shut down much of the global economy in 2020. When the globe reopened, consumers found many products running short. Demand outstripped supply, the classic formula for worth rise. 

“The COVID shutdowns were the biggest, sharpest economic collapse in modern history,” said Joshua Gotbaum, scholar in residence at the center-left Brookings Institution. “And it was followed by the biggest worth rise in 40 years.”

In March 2021, President Biden signed a $1.9 trillion stimulus invoice, directing payments of up to $1,400 to pandemic-stricken Americans. The Trump administration had already sent two rounds of stimulus checks, in March and December of 2020.  

Some economists pilloried Biden at the period, saying the third round of stimulus relief was unnecessary, excessive and likely to overheat the economy. Many more economists declare that now. 

“There was no rationale to do it,” said Douglas Holtz-Eakin, president of the correct-of-center American Action Forum. “It was just way too large, and impoverished things had to happen, and the predictable impoverished things did.” 

Holtz-Eakin was among those who spoke out against the relief invoice at the period.  

Taken together, the Trump and Biden stimulus bills “amounted to something like 20% of GDP,” the country’s total economic output, said Desmond Lachman, a elder fellow at the correct-leaning American Enterprise Institute. “That is the largest financial stimulus we’ve had in peacetime. That, I ponder, is a large part of the narrative.” 

Other economists downplay Biden’s stimulus invoice as a factor in the customer-worth explosion that followed. 

“Biden/Harris don’t bear primary blame for the worth rise,” said Jeffrey Frankel, a Harvard University economist. “Primary blame, rather, goes to supply constraints as the economy came out of COVID and the acceleration of goods prices that came with Russia’s invasion of Ukraine.”

Frankel noted that Harris, as Biden’s vice president, bears even less blame for the stimulus package than Biden himself.   

Ukraine invasion ‘gave worth rise another breath’

In February 2022, Russia invaded Ukraine. Most economists who spoke to USA TODAY, including Frankel, cite that occurrence as a leading factor in the run-up of customer prices.  

The annual worth rise rate had hovered below 3% for years when the pandemic hit. worth rise sat at 1.7% in February 2021, just before Biden’s stimulus invoice. By mid-2021, as the global supply chain reeled, worth rise topped 5% for the first period in more than a decade. In December of that year, worth rise reached 7%.  

worth rise hit 8.5% in March 2022, after the Ukraine invasion. Gas prices soared history $4 a gallon. 

The invasion “sent shock waves through goods markets,” Sweet said. “That benevolent of gave worth rise another breath of air.” 

March 2022: The Fed steps in

In March 2022, the Federal safety net responded to the country’s overheated economy by raising gain rates. The point of reference federal funds rate had sat at zero, effectively, since the commence of the pandemic. 

Between March 2022 and July 2023, the central lender would raise rates by more than 5 packed percentage points, to a peak over 5%, in an aggressive campaign to tamp down worth rise. 

It wasn’t too little, most of the economists said, but it was too late. 

Jerome Powell, the Fed chief, “should have been reacting to this by raising gain rates a lot earlier than he did,” Lachman said. 

The Fed acts independently, the economists noted, so consumers shouldn’t blame Biden or Harris for the Fed’s response to the worth rise crisis. 

Going back to 2020, the Fed had purchased “massive amounts of obligation financial instruments” in response to the pandemic, according to a Brookings Institution update, boosting the money supply. That campaign, too, fed runaway worth rise, economists said. 

The pandemic and Ukraine war triggered a spike in prices. As the pandemic eased, and as the global economy adjusted to the war, “those prices should have arrive back down,” Bourne said. “The permanence, the persistence and the magnitude of the worth rise that we’ve seen can only be explained by the excessive macroeconomic stimulus.” 

Bourne refers to both Biden and the Fed: Biden’s stimulus payments, and the Fed’s actions on gain rates and the money supply.  

“I don’t pin the blame all on the Biden administration,” Bourne said. “But certainly, the Biden administration didn’t assist the circumstance.” 

worth rise is down. Prices remain high

worth rise gradually eased: the annual rate now hovers near the Fed’s objective of 2%. Yet, the effects of chronic worth rise remain: Prices are still high. 

“Americans can inform you, down to the penny, what gas prices are, bread prices, egg prices, correct now as opposed to four years ago, eight years ago,” Sweet said.  “The American customer generally has a short recollection, except when it comes to prices.” 

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Both the Republicans and Democrats have now lost the presidency − in 2020 and 2024, respectively − because of the pandemic and its economic effects, said Gotbaum, the Brookings economist.

At a information conference recently, Powell, the Fed chief, acknowledged community antipathy about lingering worth rise and its potential influence at the polls. 

“We declare the economy is performing well, and it is,” Powell said. “But we also recognize that people are still feeling the effects of high prices. … And, you recognize, we don’t inform people how to feel about the economy.”