President Donald Trump is pointing fingers at his predecessor, Joe Biden, over the ongoing affordability issues in the U.S. Many voters, however, feel frustrated and blame Trump for their financial struggles.
It’s easy to play the blame game, but both politicians have had their hand in shaping the economy. For instance, Trump’s tariffs disrupted supply chains, while Biden’s pandemic stimulus aimed to revitalize the economy.
But here’s the crucial point: presidents don’t set prices. Prices are shaped by businesses and driven by supply and demand. According to Tyler Schipper, an economics professor, “Presidents often get the credit or blame for the economy, but many aspects of inflation are beyond their control.”
Every president wants to appear capable in tough times like these, so shifting blame can seem like a quick fix.
Biden often referred to inflation as a temporary issue stemming from pandemic-related supply chain problems, the conflict between Russia and Ukraine, or corporate greed. Now, Trump claims he inherited a dire inflation crisis from Biden, a statement that overlooks recent trends.
When Trump took office in 2025, inflation under Biden was already under control, dropping from a peak of 9.1% to just 3%. This improvement highlights that the worst was over long before Trump’s administration.
Economists say inflation during Biden’s term was caused by production problems. After the pandemic, consumer demand surged, which contributed to supply chain bottlenecks. In essence, people wanted to spend, but the system struggled to keep up.
A significant driver of that demand was the nearly $2 trillion stimulus from Biden, which handed $1,400 checks to many Americans. While some argue it was overly inflationary, it was popular with voters and a necessary response to the pandemic crisis.
Brett Ryan, a senior economist at Deutsche Bank, pointed out that policymakers often prefer a little too much stimulus over risking a severe recession. In retrospect, relief measures had their consequences but were deemed essential at the time.
Low interest rates also played a role by encouraging homeowners to refinance mortgages. This turned approximately $430 billion into cash, boosting household spending.
Another issue affecting affordability is housing. The Great Recession in 2007 limited new housing construction. Ryan estimates we are short about 3 to 5 million housing units currently.
Global forces, like the Ukraine conflict, further compounded the problem as energy and food prices soared. After Russia invaded Ukraine, the Consumer Price Index—the key inflation measure—spiked significantly. In June 2022, gas prices reached an all-time high of $5.02 per gallon.
However, these peaks didn’t last. By the end of the year, gas prices fell, and inflation dropped to 3% at the beginning of 2025.
Trump’s tariffs continue to put upward pressure on some prices, but economists believe the impact is manageable. Mark Zandi from Moody’s Analytics noted that businesses have hesitated to fully pass on tariff costs to consumers.
Despite public concerns about rising prices, most spending occurs in sectors like housing and health care, not directly tied to tariffs. Federal Reserve Chair Jerome Powell pointed out that without the tariff effects, inflation could be near the desired 2% rate.
In summary, while both political parties play a role, inflation results from a complex mix of factors, both domestic and global. As David Wessel from the Brookings Institute shared, “Presidents receive more blame and credit for the economy than they deserve.” Voters understandably want to see prices fall, but they’re unlikely to be satisfied with just 2% inflation as a target.
For more insights on inflation trends and government policies, check the latest reports from Moody’s Analytics.
