After more than two years of facing political backlash over rising prices, Wednesday’s inflation report gave many Democrats a sense of victory.
Consumer prices increased by 2.9 percent in the year through July, dipping below 3 percent for the first time since 2021. This report positions the Federal Reserve to reduce interest rates next month, a move that could boost economic sentiment in the United States ahead of the November election.
“We’ve won the battle against inflation,” Bharat Ramamurti, former deputy director of the National Economic Council, posted on X. “It’s time for the Fed to begin cutting rates.”
Congressional Democrats are also using the report to urge the Fed to cut rates more aggressively.
“Inflation is down,” stated Senator Martin Heinrich of New Mexico, chairman of the Joint Economic Committee, in a news release. “Gas prices and the cost of a new car have dropped over the last year. Many families can now breathe a bit easier. Now, we need to ensure this relief reaches all Americans.”
However, Republicans, who have consistently criticized Democrats over inflation, are not backing down. They continue to point out that prices have risen nearly 20 percent since President Biden took office and warn that the labor market shows signs of weakening.
“Despite a slight improvement in the rate of price increases, the damage from the Biden-Harris administration’s philosophy of ‘tax it, regulate it, and spend it’ is done and continues to plague the economy,” said Representative Jodey Arrington of Texas, chairman of the House Budget Committee. “It’s hard to fathom how hardworking American families can survive another four years of the Biden-Harris failed economic agenda.”
Vice President Kamala Harris, the Democratic presidential nominee, has vowed to crack down on corporate price gouging and is expected to announce additional plans for reducing costs in a speech this week.
Former President Donald J. Trump, her Republican opponent, is scheduled to hold a rally in Pennsylvania this weekend, focusing on inflation. His campaign argues that the Biden administration’s spending policies have driven record levels of inflation.
“Under Kamala Harris, everything costs 20 percent more than it did under President Trump,” said Karoline Leavitt, the Trump campaign’s national press secretary. “America cannot afford another four years of Kamala’s failed economic policies.”
While President Biden welcomed the positive inflation figures, he acknowledged that the cost of living remains high. He criticized large corporations for sitting on record profits and not doing enough to help.
“We have more work to do to lower costs for hardworking Americans, but we are making real progress,” Biden said, noting that wages have outpaced price increases for 17 consecutive months. “Prices are still too high.”
