Last year, the Dutch central bank launched a study into how inflation shapes sentiment. The results should be chilling for US President Joe Biden, as he prepares for the upcoming presidential debate and election campaign. What Dutch economists determined is that not only do consumers — aka voters — think it is the job of government not central banks to deliver price stability, but when prices swing wildly this cuts confidence in all institutions.
Either way, the imbalance could make it politically tough to reverse the IRA even if Trump wins in November, since many Trump-supporting areas are seeing an investment boom. Yet that same demographic apparently blames Biden for a “bad” economy. Why? One explanation might be data flaws. The basket of goods used to calculate average inflation, for example, does not always reflect actual household budgets, particularly poorer ones.