“Despite a mix of coverage in the media, the prevailing message from officials seems to be “don’t panic.” The Federal Reserve predicts this period of rising prices to be “transitory,” and there are signs that price increases are starting to slow. But in the meantime, Americans are worried about inflation, and most blame the Biden administration, according to recent polls. It’s why Biden switched gears this week, going from celebrating the passage of his bipartisan infrastructure bill to addressing inflation concerns.”
“Seventy-six percent of U.S. adults said gas prices had gone up “a lot,” and 65 percent said food prices had gone up “a lot,” according to an Economist/YouGov poll conducted Nov. 6-9. One in four Americans said they spent more on groceries in October, compared with September, according to a Morning Consult poll conducted Oct. 29 through Nov. 3. And a Scott Rasmussen national survey conducted Oct. 11-13 found that 77 percent of registered voters had “recently experienced sharp increases in the cost of items they would like to buy.””
“Increased prices can impact voters’ political views of the economy overall because their effects are felt so immediately, contributing to Biden’s negative approval rating. “There is a psychology to inflation that is different from everything else, and it tends to drive how people view the economy because they experience it every day whether it is at the grocery store, gas pump or buying household goods,” John Anzalone, a Democratic pollster, told the Los Angeles Times.
Polling captures how voters are thinking about inflation as a political issue. A plurality of registered voters (40 percent) said the Biden administration’s policies were “very responsible” for the inflation, and a majority (62 percent) said the administration’s policies were at least “somewhat responsible,” according to a Politico/Morning Consult poll conducted Oct. 16-18. In a Harvard/Harris poll conducted Oct. 27-28, 56 percent of registered voters said they weren’t confident in the Biden administration’s ability to keep inflation at bay, and 53 percent said the same about the Federal Reserve’s ability. A majority (56 percent) said that Congress passing a $1.5 to $2 trillion social spending bill (such as the one they’re currently trying to pass) would lead to more inflation.
While the public reaction is out of step with expert forecasts, their fears should not be brushed aside. Some economists theorize that, left unchecked, fears about inflation can make the situation worse by creating a self-fulfilling prophecy in which employees, afraid of rising prices, demand higher wages, the costs of which employers would then cover through raising prices, leading to higher inflation. This is what happened in the 1970s, and it led to nearly double-digit inflation rates. Regardless of how transitory the Fed thinks these price increases will be, Americans are worried right now.”