Inflation won Trump the presidency, but could cost him the midterms | Inflation

For such an uncannily successful politician, Donald Trump displays a puzzling political myopia. His last own goal was supporting state attorney general Ken Paxton against four-term senator John Cornyn in the Senate primary in Texas. Trump’s support helps increase pressure ethically compromised Maga firebrand Running against popular Democrat James Talarico in November complicates Republicans’ chances of retaining the seat.

But what really screams “I want us to lose the midterms” is Trump’s actions on inflation, which has become his most vulnerable issue. According to a New York Times/Siena poll Considering the proportion of registered voters in early May, Trump’s approval on handling cost of living trails by 42 percentage points; This is weaker than his rating on handling the economy (minus 31 points) and the unpopular war in Iran (minus 34 points).

It’s not uncommon for him to have one most effective weapons His defeat of Kamala Harris in 2024 has turned against him now that he’s running things. What’s truly surprising is how eager Trump seems to be to establish a record of inflationary policymaking. He seems to have decided that no matter what kind of fork comes his way, he should take the one that will lead to higher prices.

The list of inflationary gambits probably begins with the round of “reciprocal” tariffs that Trump implemented in April of last year and adjusted, rearranged, raised, cut and lowered them after the Supreme Court told him to do so. A report from the Yale Budget Lab It was concluded that tariffs It increased the price of durable goods by up to 3.8% in the 13 months to January 2026.

Trump was lucky. Importers stockpiled imports in late 2024 and early 2025 in anticipation of tariffs. Even when tariffs hit, they covered the higher costs through compressed margins. Moreover, the rapidly increasing prices of goods were masked by the decline in services inflation, which was not affected by taxes.

It has also been lucky so far with a mass deportation campaign that has yet to do much to reduce employment in immigrant-heavy sectors such as food processing, construction, child care and health care. As deportations continue, a more limited supply of workers will increase wages and feed at higher prices.

And that’s where the luck ends. Last year’s decision to end increased subsidies for health insurance under the Affordable Care Act was notable. There are insurance premiums increased by 58% on averageAccording to the Kaiser Family Foundation. Deductibles rose an average of 37% to a record $3,706. KFF estimates that up to 6 million Americans in total may cancel their insurance this year.

Energy is his real sweet spot. The zero-regulation, pedal-to-the-metal approach to AI may not be the main driver of massive investment in power-hungry AI data centres. raise the price electric. However, by adding to his efforts cancel wind energy It is clear that the projects do not help consumers with increasing electricity bills. despite that claims to have a fight For cheaper electricity, household energy prices in April were 6.4% more expensive than a year ago.

Then there is the war that Trump decided to launch against Iran, which predictably led to Tehran choking the Strait of Hormuz and sharply restricting global oil and gas supplies. The nationwide average price of regular gasoline hovers around $4.50 per gallon; That’s about $1.30 higher than a year ago. This resulted in an increase in consumer prices; This increase increased by 3.8% in the period until April, the highest annual rate in the last two years.

The impact of the war is unlikely to end anytime soon. Analysis of economists Dallas Fed It is estimated that the increase in oil prices due to the war may contribute between 0.2 and 1.8 percent to annual inflation by the end of the year, depending on how quickly the strait will be opened, whether it will remain open, and the uncertainty regarding its future status.

It is difficult to parse people’s attitudes towards inflation. They’re thinking less about the alphabet of indexes like the CPI and PCE that policymakers focus on, and more about how much the prices of eggs and gas have risen since they last remembered. They hate inflation even if wages keep up with prices; They see wage increases as a fair reward and inflation as an unfair burden, as has been the case on average since Trump took office; even though both are driven by the same macroeconomic forces.

In the eyes of many Americans, fighting inflation means forcing prices to fall, not slowing the rate; It’s a choice that Trump paid lip service to in his presidential campaign, even though it would almost certainly require a deep recession to lead to lower prices overall.

Whatever their prejudices, they seem willing punishing officials for rising prices. a study People who personally felt the burden of inflation and observed it in their local communities were less likely to vote Democratic than those who didn’t, according to the poll conducted just before the 2022 midterms. (Those who attributed this to government spending especially leaned heavily toward Republicans.)

Inflation was lower on election day in 2024 than it is today. Still, researchers found: I’m just asking people Thinking about inflation caused support for the Biden-Harris administration and the Democratic party to decline. A. third study The research, based on actual votes cast, revealed that Trump’s vote share in 2024 increased more than in 2020 in regions where inflation was higher.

This may not be statistically sound, but since George H. W. Bush lost to Bill Clinton in 1992, there has only been one presidential election in a year with inflation as high as it is today. Incumbent George W Bush lost to Barack Obama.

We might have thought Trump understood these things, given his successful use of inflation as a political cudgel just two years ago. But who knows? He attacks the Fed not because he wants it to control inflation, but because he wants it to lower interest rates. At this stage this would be very bad for inflation. Maybe he wants to lose?