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Next Gen Econ > Personal Finance > Retirement > Breaking Down Inflation Under Trump vs. Biden
Retirement

Breaking Down Inflation Under Trump vs. Biden

NGEC By NGEC Last updated: July 31, 2025 9 Min Read
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Inflation under Trump and Biden reflects two very different economic backdrops. During Trump’s first presidency, inflation remained modest, with rates generally staying below the Federal Reserve’s 2% target. Under Biden, inflation surged beginning in 2021, influenced by supply chain disruptions, stimulus spending and rising energy costs. Forecasts for a second Trump term suggest that his tariff and immigration policies could lead to renewed inflationary pressure rather than a return to pre-2020 trends.

Do Presidents Impact Inflation?

Presidents can influence inflation indirectly through fiscal policy, regulatory priorities and appointments to the Federal Reserve. However, they don’t control inflation outright.

The Federal Reserve plays a major role by setting interest rates and using monetary policy to manage inflation. It does this independently of the White House. However, presidential policies on taxes, spending, tariffs and immigration enforcement can affect demand, labor supply and supply chains. These can in turn influence price levels.

For example, large stimulus packages can boost consumer spending, while tariffs may increase input costs for businesses. Immigration policies that reduce the labor force may contribute to wage pressures, which can ripple through to consumer prices.

Still, inflation remains outside presidential direct control. It is also shaped by global trends, commodity prices and unforeseen shocks like pandemics or wars. While it’s common to credit or blame a president for inflation during their term, it’s often the result of many overlapping factors. These can include decisions made by prior administrations, private sector behavior and international economic dynamics.