Trump Fanned Inflation Fears. Now They Haunt His Presidency.
Consumer expectations about price increases can be self-fulfilling.
Kitchen table issues.
Photographer: Bing Guan/Bloomberg
Inflation concerns may very well have delivered Donald Trump to the presidency. During the campaign, he routinely harped on the elevated cost of eggs and bacon and argued that his predecessor Joe Biden — together with Federal Reserve Chair Jerome Powell — had enabled an “inflation nightmare.” Now, he faces public inflation expectations that are utterly divorced from reality and could well stand in the way of his success as president.
The latest University of Michigan survey showed that consumers expect costs to rise 4.3% over the next year, the worst inflation expectations since 2023. More disconcertingly, they expect prices to rise 3.3% annually over the next five to 10 years, the highest level for the longer-term gauge since 2008. Mainstream economists are far more optimistic, but the perception of an ongoing inflation crisis could well be self-fulfilling.