Harris and Trump against inflation, but their policies may raise prices

CNN —

Inflation is gradually returning to a more sustainable pace after a post-pandemic spike. However, the surge in price hikes has made it difficult for many Americans to cope with the increased cost of living. Both Vice President Kamala Harris and former President Donald Trump have vowed to reduce costs, but economists warn that their proposed policies could potentially exacerbate inflation. And while both candidates’ plans may increase the deficit and boost demand, Trump’s plan poses a higher risk of escalating inflation.

Economists caution that both campaigns’ proposals could result in higher deficits and inflationary pressures. Harris’ proposed policies could potentially increase deficits by trillions, mostly due to the expansion of the Child Tax Credit. On the other hand, Trump’s economic plan might lead to even greater inflation risks.

A comprehensive analysis of both candidates’ proposals is forthcoming as more details on funding are revealed, according to the Committee for a Responsible Federal Budget (CRFB).

Risks of fueling demand

Harris’ plan to make housing more affordable includes building new units and providing support for first-time homebuyers. While efforts to increase housing supply could ease the current market bottleneck, economists express concerns about stimulus measures that could fuel inflation.

Expanded child tax credits and bans on price gouging are other potential inflationary triggers, according to experts. The impact of these policies on inflation and the overall economy remains a topic of debate.

Trump’s economic proposals, including tariff hikes and tax cuts, have raised concerns among economists. The potential consequences of these policies on inflation and the labor market have garnered mixed reactions from experts.