Donald Trump promised at his January 2025 inauguration to use the powers of his administration to fight inflation and quickly lower prices. Nearly two years later, persistent cost-of-living pressures have become a major source of voter dissatisfaction and helped propel Democrats to victory in the midterm elections, giving the party control of both the House and Senate, the report says.

Prices, which had already been a concern during Joe Biden’s presidency, accelerated again amid U.S. tariffs and the war in Iran. The report also links rising energy costs to the rapid expansion of data-center construction for artificial intelligence. Higher interest rates have added to the strain by making mortgages and consumer spending more expensive.

An Associated Press survey cited by The Washington Post found that 39% of Americans consider the economy the country’s most important issue, while nearly 90% say the cost of living was an important factor in their vote. Three-quarters described the economy as poor or very poor, and almost 80% said inflation had caused financial difficulties for their families over the past year.

Tomás Urani, chief market strategist in Santander’s economic department, said the cumulative effect of price increases over several years is more troubling to households than inflation alone. Andressa Durão, an economist at ASA, said Trump’s tariffs raised the cost of goods, while the war in Iran pushed up fuel prices. She also pointed to growing dissatisfaction over higher electricity prices near new data centers.

The latest consumer price index reading cited in the report showed inflation rose 0.6% in September and 3.7% over 12 months, with gasoline driving the increase. Economists Felipe Mecchi of C6 Bank and Bernardo Dutra of Itaú Unibanco also highlighted fuel and energy costs, noting that higher fuel prices can feed into freight and other expenses.

The economic picture is not uniformly weak: U.S. GDP is growing at an annual rate slightly above 2%, and the labor market remains robust, according to Mecchi. But the Federal Reserve has limited room to respond to price pressures. It kept its benchmark rate in a range of 3.75% to 4% a year and said future decisions would depend on incoming economic data. Investors expect further rate increases could be needed from December, with additional rises in 2027, according to CME Group’s FedWatch tool.

Sources: Folha Mercado.