I'm an economist: 4 reasons why Americans should trust Kamala Harris to lower inflation

Josh Brown/ZUMA Press Wire / SplashNews.com / Josh Brown/ZUMA Press Wire / SplashNews.com

Commitment to our readers

The GOBankingRates editorial team is committed to providing you with unbiased reviews and information. We use data-driven methods to evaluate financial products and services – our ratings and reviews are not influenced by advertisers. Learn more about our editorial policies and product and service rating methodology here.

20 years
We help you live richer

Trust from
Millions of readers

The U.S. inflation rate rose to its highest level in more than four decades under President Joe Biden, peaking at 9.1 percent in 2022. Thanks to a series of interest rate hikes by the Federal Reserve, the annual rate has since fallen sharply to 2.9 percent, but it is still above the Fed's target of 2 percent.

Although Kamala Harris served under Biden during a time of high inflation, many Americans – and some economists – are confident that she can reduce inflation if she defeats former President Donald Trump in this year's presidential election.

A new GOBankingRates poll of 1,004 U.S. adults found that Harris received higher marks than Trump when asked who they think will do a better job of fighting inflation as president. Here are the results:

• Harris: 43.63%
• Trump: 39.44%
• Either: 2.99%
• Neither: 7.87%
• I do not know: 6.08%

These results show, among other things, that Harris has largely avoided blame for the high inflation experienced during Biden's tenure. As Forbes noted in a recent analysis, inflation rose 19 percent in Biden's first 42 months in office, compared to just 6 percent in Trump's first 42 months.

Still, some economists are confident Harris can bring prices down — if she makes the right decisions. Here are four reasons Americans can trust Harris to bring inflation down.

She will not make hasty decisions

Harris knows what is at stake for the economy if she fails to get inflation under control, so she and her advisers are likely to pursue a dovish approach to solving the problem.

“Inflation dynamics are largely driven by consumer and business confidence,” said Chuck Warren, political economist and host of the Political Podcast, GOBankingRates in an interview earlier this summer. “If the Harris administration can manage a smooth transition and communicate its intentions transparently, it could maintain or strengthen confidence and thus stabilize inflation.”

Alan Andrews, trade finance specialist at KIS Finance, told GBR that inflation could rise if Harris chooses to keep interest rates low to stimulate economic growth.

Let your money work for you

Get the latest news on investing, money and more with our free newsletter.

By registering, you agree to our terms of use and privacy policy. You can unsubscribe at any time.

Thanks!

You are now subscribed to our newsletter. Check your inbox for more details.

“However, if Harris is more cautious and advocates steps to curb inflation, the Fed could adjust its policy accordingly,” Andrews said.

It will take action against anti-competitive practices

According to CBS News, Harris supports passing the first federal law against price gouging by food suppliers and grocery stores. This idea is based on data showing that some food companies have made record profits despite blaming inflation for skyrocketing food prices.

Dan Scheitrum, a professor of agricultural economics at California Polytechnic State University in San Luis Obispo, told ABC News that Harris' plan to crack down on potentially anti-competitive practices in the food sector could lead to lower prices for some staple foods.

“If price fixing takes place and action is taken against it, I think that could reverse some of the price increases,” Scheitrum said.

However, not everyone is convinced by the idea.

“There are many reasons for the high inflation we have suffered over the past few years, but aggressive or unfair pricing practices are low on the list of reasons, if they are on the list at all,” Mark Zandi, chief economist at Moody's Analytics, told CBS MoneyWatch. “This may have been a bigger problem in the past when supply chains were disrupted by the pandemic, but today it is hard to find significant, meaningful examples of price gouging.”

It will avoid tariffs

Some economists warn that inflation could get even worse if Trump wins a second term, largely because of his plans to raise tariffs and crack down on illegal immigration – both of which could drive up prices, the Wall Street Journal reported.

“I think there is a real risk that inflation will pick up again under a Trump presidency,” Bernard Baumohl, chief economist at the Economic Outlook Group, told the WSJ, adding that such a trend would likely prompt the Fed to set interest rates higher than if inflation maintained its current downward trend.

Harris, on the other hand, criticized Trump's advocacy of higher tariffs and is unlikely to pursue a similar policy as president.

Inflation is already moving in the right direction

What is certain is that inflation rates have fallen considerably in recent years, so Harris does not have to do nearly as much to bring them down as she would in 2022. One important step she can take if elected president is to inspire confidence that she has economic affairs under control.

“Inflation is not just a mere monetary expansion; it is a multifaceted phenomenon driven by multiple factors, including political stability and policy direction,” Warren said. “A likely transition from Biden to Harris could cause short-term volatility, but if properly managed will certainly not have a massive impact on future inflation trends. The key will be clear communication, backed by a steady hand in economic policy.”

At the same time, according to the GBR survey, inflation is by far the most important economic and financial issue in the 2024 election cycle. Respondents rated five different issues in order of importance:

• inflation: 49.20% of respondents
• Social Security and Medicare: 26.89%
• Government spending: 9.06%
• Health costs: 7.97%
• unemployment: 6.87%

Editor's note on election coverage: GOBankingRates is nonpartisan and strives to objectively cover all aspects of the economy and present balanced reporting on politically focused financial topics. For more reporting on this topic, see “I'm an Economist: Here Are My Inflation Predictions If Trump Wins.”