As voters weigh the economic records of both parties ahead of the midterms, cost-of-living concerns have emerged as a defining issue. Some point to the 40-year high inflation under President Joe Biden, while others blame President Donald Trump’s tariff policies and the conflict in Iran.
Democrats fault Trump for high gas prices and other expenses, while voters compare the cost-of-living differences between blue and red states.
As both parties trade blame for rising costs, here is a look at where their economic track records actually stand.
Trump and Biden
Throughout his 2024 campaign, Trump routinely promised to bring down inflation and restore affordability, and before the war in Iran began in late February, headline consumer inflation in the United States had been inching closer to the Federal Reserve’s elusive 2 percent target.
However, the inflation outlook changed significantly once the conflict broke out and disrupted traffic through the Strait of Hormuz, driving up global energy prices.
Now approaching its ninth month, the war has kept the annual inflation rate in the United States persistently above 3 percent.
While energy-driven price hikes mirror the challenges the previous administration faced, Biden contended with an even more severe inflation shock.
Under his presidency, annual inflation peaked at a 40-year high of 9.1 percent in June 2022, becoming a major vulnerability for his economic record. The annual inflation rate was 1.4 percent when he took office in January 2021.
Critics, including Republicans in Congress, blamed his energy policies for the rise in prices across the board, from gas stations to grocery stores.
Soon after taking office in 2021, Biden signed several executive orders targeting the fossil fuel industry, including canceling the Keystone XL Pipeline permit and pausing new oil and gas leases on federal lands.
In response, energy companies curbed investments and scaled back expansion plans. Supply constraints unsettled energy markets, driving oil and gas prices significantly higher throughout 2021 and 2022.
Under Biden, the national average gas price reached an all-time high of $5.02 in 2022. It was not until late 2025, during the second Trump administration, that the national average slipped below $3.
Gas prices later surged in 2026 as crude oil climbed toward $100 per barrel in response to the war in Iran. This pushed the national average to about $4.50 per gallon in May 2026, the highest level of the year so far. Since then, prices have moderated somewhat, with the national average standing at about $4.27 per gallon on Oct. 27.
Almost two years into Trump’s presidency, Americans remain deeply frustrated by the cost of living, which continues to shape their views of the broader economy and their choices at the voting booth.
Heading into the midterms, various polls show that Trump’s approval ratings on the economy and inflation are firmly underwater. An Oct. 6 Economist–YouGov poll found that 36 percent of respondents approved of the president’s handling of the economy.
Red and Blue States
Many consumers continue to cite the cost of energy—from gasoline to utility bills—as major concerns heading into the midterms, making affordability a prominent issue for policymakers and political candidates alike.
In addition, activists are bringing dozens of climate lawsuits against energy companies that, if they succeed, could sum to hundreds of billions of dollars in damages for companies that produce or refine oil, gas, and coal.
These costs would likely be passed on to consumers in the form of price hikes.
Diesel prices have also rocketed during the Iran conflict. While the fuel cost is down from its record high of almost $6.53 in September, the average price per gallon is still firmly above $6, about 40 percent higher than a year ago.
Housing Affordability
Like electricity costs, housing affordability diverges between red and blue states.
According to a 2025 Realtor.com report, the most affordable states for housing are in the South and Midwest.
The report notes that states in the South and West are building the most homes, with seven states in these two regions accounting for more than half of new-home construction permits issued across the country in 2024.
Both the Biden and Trump administrations proposed measures they claimed would improve housing affordability after the unprecedented surge in record home prices following the COVID-19 pandemic. This past summer, lawmakers also passed the most comprehensive housing bill in decades—the 21st Century ROAD to Housing Act.
The legislation includes dozens of provisions to boost supply, including streamlining environmental reviews, encouraging states and localities to reform zoning and land-use guidelines, supporting housing modernization, and restricting large institutional investors from buying single-family homes.
Interest Rates and Borrowing Costs
Trump has said lower interest rates would be “rocket fuel” for the U.S. economy.
One way to achieve this, according to the president, is for the Federal Reserve to act.
“Because the U.S. economy is so strong, regardless of the Fed’s formula, we should have the lowest interest rates in the world,” Trump told reporters ahead of the Fed’s September policy meeting.
But the central bank, like many of its counterparts, has been heading in the other direction.
The Fed followed through on its first quarter-point rate hike since July 2023 in September, and policymakers and markets alike are penciling in at least one more rate hike to prevent second- and third-order inflation effects.
—Andrew Moran; Kevin Stocklin; Emel Akan
BOOKMARKS
The Federal Reserve kept interest rates steady one week before the 2026 midterms. In a widely expected decision, the Federal Open Market Committee voted 10–2 to keep the benchmark federal funds rate in the current target range of 3.75 percent to 4 percent.
The Department of Justice intends to follow through on its plan to send 1,000 election monitors and observers to polling locations around the United States ahead of the midterm elections. “Every monitor will merely observe and report any potential violations of federal law to the department, which will be reviewed after Election Day,” DOJ spokeswoman Kiersten Pels said in an emailed statement.
Former Vice President Kamala Harris this week became the latest Democrat to speak out against trying to impeach President Donald Trump if her party prevails in the midterms. “I think the energy and the resources need to be put into accountability, need to be put into investigations,” she said.
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—Stacy Robinson
