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High inflation that plagued much of President Biden’s time in the White House could come back to haunt his likely successor, Vice President Kamala Harris, in the upcoming presidential election against Republican nominee Donald Trump.
Many investors anticipate that Harris will push for a continuation of Biden’s economic policies that some believe exacerbated the inflation crisis. “In general, we think she’ll pick up the Biden-Harris mantle,” strategists at Evercore ISI said in a note Tuesday.
That could put her on a collision course with voters who are still feeling the sting of higher prices and are looking to hold someone accountable at the ballot box in November.
“If it’s essentially the same platform, Americans who feel left behind by the economy, burnt out because of inflation, feeling like they’re not getting by, they might still continue to cast the same amount of blame to Harris as they did for Biden, because she was still really in the White House when inflation surged,” Sarah Foster, a Bankrate analyst, told FOX Business.
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President Biden, left, and Vice President Kamala Harris on the Truman Balcony of the White House in Washington, D.C., on July 4, 2024. (Tierney L. Cross/Bloomberg via Getty Images / Getty Images)
The state of the economy has consistently ranked as a top priority for voters. About 89% of voters said the handling of the economy will be very important or somewhat important in determining who they vote for in the upcoming election, according to a recent Bankrate survey.
“I think all elections really rely on the strength of the economy, at least for the incumbent administration,” Foster said.
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Under Biden, inflation skyrocketed to the highest level in 40 years. The cost of everyday necessities like rent, groceries and gasoline surged, prompting the Federal Reserve to hike interest rates to a two-decade high. Higher interest rates, in turn, created other downstream effects, pushing mortgage rates above 8% for the first time in decades and making it much harder for businesses to access credit.
While inflation has fallen from a peak of 9.1% and the Fed appears poised to cut interest rates this fall, many Americans have yet to feel material relief.
Food prices are up 21% from the start of 2021, while shelter costs are up 21.6%, according to FOX Business calculations. Energy prices, meanwhile, are up 32%. Price hikes are particularly devastating for lower-income Americans because they tend to spend more of their already-stretched paycheck on necessities and therefore have less flexibility to save money.
“Inflation will continue to be a concern for voters, despite Harris not being president [at the time],” Steve Pesavento, managing principal of VonFinch Capital, told FOX Business. “While the Fed was working to tamp down inflation, the current administration’s policies and spending caused the opposite result, leading to persistent inflation and increased cost of living for Americans.”
He added: “Voters will not overlook this come time to visit the ballot box.”
Shoppers are seen in a Kroger supermarket on Oct. 14, 2022, in Atlanta, Georgia. (ELIJAH NOUVELAGE/AFP via Getty Images / Getty Images)
Ted Jenkins, a certified financial planner at Oxygen Financial, told FOX Business that Harris may not face the same anger over inflation that Biden would if he were running for re-election.
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“Many voters will ultimately vote on personality versus policy when they get to the ballot box and have an extremely short memory when it comes to what happened last year versus last week,” he said.
