Democrats and Republicans have wildly different expectations for inflation in 2022. Republicans expect prices to rise about 7% over the next year — more than double the 3% increase expected by Democrats, according to last month’s University of Michigan survey of consumer sentiment.
Shock figure: That’s the widest partisan gulf recorded since the survey began asking about party affiliation in 1980.
This polarization in inflation expectations is a relatively new phenomenon, says Richard Curtin, the survey’s chief economist. It began in the 2000s under Presidents George W. Bush and Barack Obama “at a very low, unconcerning level,” he said. “But it exploded once Trump was elected.”
“Unfortunately, the size of the partisan divide in expectations has completely dominated rational assessments of ongoing economic trends,” Curtin wrote in a report this week. “This situation is likely to encourage poor decisions by consumers and policy…
