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Summary of article:
After the Democratic Party takes control of Congress, the cooling of inflation still depends on three key factors: the Iran war, the expansion of AI data centers, and the direction of tariffs. A sharp drop in prices in the short term will not be easy.
democratic party In the mid-term elections, Congress lost control over both houses in one stroke.republican party With the Trump administration’s “total rule” position over the past two years. The biggest reason is that voters are dissatisfied with the rising costs of living like gasoline and food and express their anger through their votes.
Many Democrats promised to lower the cost of living during the campaign, but the trend of rising prices may take some time to stabilize, USA Today reported, citing analysis from several experts.inflation Whether it can successfully contain or cool the economic threat will depend primarily on three things: the Iran war, artificial intelligence (AI) and tariffs.
Francesco D’Acunto, associate professor of finance at Georgetown University, believes high prices existed long before President Trump’s second term. The sudden increase in prices in 2026 is mainly due to the impact of the Iran war, the creation of AI, and tariffs. However, it seems unlikely that the new Congress will be able to significantly reverse these factors.
In February, before the war broke out, consumer prices rose 2.4% compared to the same period last year. As of September, it had increased by 3.7% year-on-year, which was faster than the growth rate of workers’ wages. Economists agree that conflicts must be reduced to stabilize prices.
Da Quinto said that if an agreement to end the war could be reached and effectively implemented, oil prices would certainly fall in the long run, leading to a decline in commodity prices.
The construction of AI data centers has driven up some price categories, such as the price of electricity. Analysts believe the Democratic Party may slow down the build-out of AI in states where it wins.
Ohio, Texas, and Georgia all elected Democrats as governors. During his campaign, he promised to slow the construction of existing AI data centers and prevent new data centers. Some state legislators believe that the financial costs should be borne by the data centers.
Utility costs in Ohio, for example, have increased 15% compared to the same period last year, said Mike Scordales, U.S. economic director at financial advisory group Truist Advisory Services. Higher cost bearing by data centers is the way forward, especially when the issue is discussed at the state level. This approach can significantly reduce the burden on the citizens of the state.
Tariffs are a cornerstone of Trump’s economic policy. However, since import taxes were imposed on global trading partners last year, most of the bill has been borne by US consumers, naturally increasing inflation.
But Blake Harden, trade policy expert at Ernst & Young, believes the tariffs are unlikely to be removed any time soon.
Trump is relying on existing statutory powers to impose tariffs, including Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. The President still has the power to impose tariffs without a new vote of Congress.
Summary FAQ
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The main reason is that voters are dissatisfied with the rising costs of living such as gasoline and food, and express their anger through voting, thus ending the absolute rule of the Republican Party and the Trump administration in the past two years.
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Experts believe whether the brakes can be put on inflation in the future largely depends on whether the Iran war subsides, whether AI drives up manufacturing costs, and whether tariff policies change. These three will affect the prices.
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Tariffs are borne mostly by American consumers, which will increase the cost of imported goods; AI data centers will increase electricity and utility expenditure, which will increase the burden on people in some states, thereby increasing inflationary pressure.
