2024 US elections: Inflation spike looms large over Joe Biden’s White House bid

A fresh surge in US inflation is challenging Joe Biden’s re-election narrative, jeopardising his ability to defend his track record on the economic front against Donald Trump.

The 3.5 percent increase in the March consumer price index, following a 3.2 percent rise the previous month has complicated Biden’s argument that inflation has been consistently decreasing since its peak in the summer of 2022.

If subsequent inflation figures exceed expectations, it could delay Federal Reserve interest rate cuts aimed at reducing borrowing costs for American households. Despite overseeing the creation of over 15 million jobs, the inflation spike during Biden’s presidency has raised doubts about his economic management and remains a significant political vulnerability ahead of the November election.

U.S. President Joe Biden, who faces former president Donald Trump in a presidential election in November, acknowledged Wednesday that still-strong inflation likely means a delay to the Fed’s rate cut plans, though he said he stands by his prediction that borrowing costs will drop this year.

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The sudden surge in inflation during Biden’s presidency has cast doubts about his economic management even after overseeing the creation of over 15 million jobs. It seems that the issue is still a major weakness as he approaches the November election.

“People still feel like the United States has a significant inflation problem,” Larry Summers, a professor at Harvard University and former US Treasury secretary, told the Financial Times. “Whether that’s because they remember the past, or because high interest rates have raised the cost of money, people are still feeling like inflation is not completely under control.”

Narrowing the gap after Trump briefly led earlier this year, Biden has managed to regain some ground in recent national polling against his rival Trump in the past few weeks. According to the RealClearPolitics.com average of surveys, the race is now essentially tied in a head-to-head match-up.

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However, the political risk for the president is significant. The consumer price index has risen by 18.9 percent since he took office in January 2021. Any halt in progress on inflation could potentially undermine any overall improvements for Biden, just seven months before the election.