President Donald Trump is blaming his predecessor, Joe Biden, for the affordability concerns that are roiling the US economy – and politics. Many voters, meanwhile, are blaming Trump for their financial woes.
Both sides might be wrong.
Biden and Trump both made policy decisions that affected consumer costs, such as the Trump administration’s tariffs that rattled supply chains or the stimulus that the Biden administration pumped into the economy just as it was coming out of the pandemic.
However, prices are not set by presidents. They’re set by businesses, sometimes through negotiations with customers. And as taught in Econ 101, prices are based greatly on supply and demand: More demand and/or less supply, and you get higher prices.
“For better or worse, presidents are held responsible for the economy,” said Tyler Schipper, professor of economics at University of St. Thomas in St. Paul, Minnesota. “But many factors of the business cycle and inflation are outside the control of the president.”
Of course, presidents — whether Democrat or Republican — don’t want to appear powerless about important voter issues, like the economy or affordability. So sometimes, the easiest solution is to put the blame on something or someone else.
During his term, Biden said the problems associated with inflation were temporary – a result of pandemic-related supply chain issues, the fault of Russia invading Ukraine or greedy oil companies.
Now in 2025, Trump is simply blaming Biden.
“I inherited the worst inflation in history,” he said, falsely, last week at a Cabinet meeting. “There was no affordability. Nobody could afford anything.”
But the worst of inflation under Biden was mostly gone by the time Trump took office this year. The 9.1% year-over-year rise in prices that occurred early in Biden’s term had fallen to 3% by January of 2025.
Economists agree much of the inflation problem under Biden was due to supply chain and production issues. People shifted their spending to buy more goods, creating bottlenecks at the nation’s ports, leading to shortages that fed inflation.
The increase in demand was partially driven by something that most politicians don’t want to criticize: the nearly $2 trillion financial stimulus package to keep the economy afloat during the pandemic that put $1,400 checks in the hands of many Americans. The bill may have been inflationary when it passed in March 2021, but it was also very popular among voters.
Some economists say that the stimulus passed by Biden and Democrats in Congress, while a mistake in retrospect, was understandable at that time.
“You’d rather have problem of overdoing (stimulus) and having inflation rather than underdoing it and having a deep recession and possible depression,” said Brett Ryan, senior US economist at Deutsche Bank.
But the stimulus wasn’t the only thing putting cash in the hands of Americans. Low interest rates led to a surge of mortgage refinancing, turning $430 billion home equity into cash put directly in the hands of homeowners, according to the Federal Reserve. Lower interest rates also reduced average payment by $220 per month, also boosting spending money.
Another major affordability issue is rising housing costs. But that took root in the bursting of a housing bubble in 2007 that caused the Great Recession under former President George W. Bush, resulting in fewer homes and apartments being built, Ryan said.
“Most estimates are than we have an undersupply of between 3 million to 5 million housing units” today, he said, adding that the blame shouldn’t fall on any particular administration.
Inflation wasn’t just an American experience coming out of the pandemic. It was a global phenomenon, spurred in large part by Russia’s attack on Ukraine and the subsequent sanctions on Russian energy.
The war drove up not only energy prices, but also fed into higher food prices. Both countries were major wheat exporters, and Ukraine also exported raw materials used in fertilizers.
In June 2022, soon after the start of the war, the Consumer Price Index — the US government’s key inflation measure — spiked to 9.1% year-over-year. That same month, gas prices hit a record $5.02 a gallon according to AAA, up 62% from a year earlier.
But neither gas prices nor inflation stayed at those peak levels.
By the end of that year, gas prices fell to $3.19 a gallon before eventually hitting $3.12 a gallon by the time that Biden left office. And inflation in January of this year was at a 3% annual rise, which is identical to where it stands in the most recent reading.
Economists widely agree that Trump’s tariffs policies are placing upward pressure on some prices, though not as much as they feared in the spring.
Mark Zandi, chief economist at Moody’s Analytics, said businesses so far have been reluctant to pass along the full tariff cost, in part due to fear of Trump’s wrath and the uncertainty of the ever-changing tariff policy.
But that won’t be the case forever, he said.
People spend most of their money on services — such as housing, insurance, interest on consumer debt and health care — rather than goods. This means tariffs ultimately haven’t had a huge impact on inflation.
At his press conference Wednesday, Federal Reserve Chair Jerome Powell said that if not for tariffs and their impact on prices, the annual inflation rate followed most closely by the central bank would be essentially at 2%, or at the target level it prefers to see price increases. Inflation was at 2.8% in its most recent reading.
That increase from tariffs has made the Fed reluctant to cut interest rates as much as Trump has demanded. While the central bank would like to see prices rise at about a 2% inflation rate, consumers who are struggling to pay bills want to see prices fall. That’s not likely to happen.
In general, “presidents get more blame and credit for what goes on in the economy than they deserve,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institute. “Voters really don’t like inflation. And Trump muddied the waters by saying he can bring down prices. They’re not going to be happy with a 2% rate of increase.”
– CNN’s Alicia Wallace and Bryan Mena contributed to this report.
