[New York Diary] "It's Inflation, Stupid!"

'Inflation, jobs, housing.'

These are the issues that young people recently identified as the most important in a survey conducted by the Harvard Kennedy School (HKS) targeting Americans aged 18 to 29. When asked to choose the two most concerning issues out of 16, the largest share of respondents, 64%, selected inflation. The issue of student loan forgiveness, which President Joe Biden is pushing for, was chosen by only 26%, the lowest proportion. The Middle East conflict ranked even lower in interest. Despite the spread of pro-Palestinian and anti-Israel protests on U.S. college campuses starting last month at Columbia University, only 34% of respondents identified the Middle East issue as an urgent concern, the second-lowest figure. This survey result is notable as it shows a significant gap between the daily newspaper coverage of anti-war protests on U.S. campuses?considered a major factor in the upcoming November presidential election?and the interests of the majority of young people.

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Inflation, anti-war protests, and illegal immigration are all major issues that could influence the presidential election outcome, but for President Joe Biden, who is seeking re-election, the most urgent problem is inflation. Inflation is also the reason voters have been critical of Biden’s economic policies and achievements despite the strong U.S. economy. Recently, Bloomberg reported on a poll showing that Biden leads former President Donald Trump in only one of seven battleground states, trailing in the other six, highlighting inflation as the key issue. Less than 20% of respondents expect inflation and interest rates to decrease by the end of the year.

It must be frustrating for President Biden. Since early last year, the U.S. economy has defied the recession predictions made by many economists and has been thriving alone. The Biden administration’s proactive policies, such as the CHIPS and Science Act (CSA) and the Inflation Reduction Act (IRA), have led to a surge in manufacturing investments by global companies in the U.S., and jobs are plentiful. The economy is so strong that even the Federal Reserve (Fed) has been unable to lower the benchmark interest rate. However, the sharp rise in prices over the past few years has caused dissatisfaction among Americans toward President Biden and even nostalgia for the Trump administration. A voter in their 30s whom I met at the New York primary last month introduced themselves as a Biden supporter but said, "Inflation is the biggest problem," adding, "I don’t feel the economy is doing well at all."

After seeming under control, U.S. inflation has continued to strengthen this year. The core Personal Consumption Expenditures (PCE) price index, the inflation gauge most closely watched by the Fed, rose 3.7% in the first quarter compared to a year earlier. This not only far exceeds the Fed’s 2% target but also surpasses experts’ expectations of 3.4%. Fed Chair Jerome Powell warned on the 1st that there has been no progress in slowing inflation and indicated the possibility of prolonged high interest rates. At a press conference following the Federal Open Market Committee (FOMC) meeting, he said, "It will take longer than expected to be confident that inflation is on a sustainable path toward 2%," adding, "We expect inflation to decline this year, but the data has weakened our confidence. We don’t know how long it will take before we can cut rates." While dismissing the possibility of rate hikes, he also implied that the previously forecasted three rate cuts this year are unlikely. The cooling of the labor market in April, which affects inflation, is at least a positive sign.

There are six months left until the U.S. presidential election. Whether inflation calms down and the Fed creates an environment to lower interest rates could determine the outcome for the two current and former presidents. The New York Times (NYT) recently published a column about anti-war protests on college campuses, stating, "If you are active in highly educated groups, you might get the impression that young people are passionately involved in the Gaza issue, but for most young Americans, economic issues like inflation, jobs, and housing are much more urgent." Americans feel the rising prices daily at grocery stores and gas stations. "It's the economy, stupid!" The campaign slogan of former President Bill Clinton, often repeated during U.S. elections, is expected to remain relevant this year as well.

This content was produced with the assistance of AI translation services.