Post-Election Democrats Freak Out Over Inflation, Expect Higher Interest Rates

Democrats are suddenly much more worried about inflation and many now expect interest rates to climb over the next six months, according to a survey by YouGov for the Economist.

The survey taken between November 9th and 12th found that a 52 percent majority of Democrats believe inflation will be higher six months from now, 23 percent expect it will be the same, and nine percent say it will be lower.

That marks a dramatic swing from their pre-election expectations. At the end of October, in a survey taken between October 26th and the 29th, just 19 percent of Democrats expected higher inflation. Twenty-nine percent expected inflation to hold steady. Thirty-three percent said they expect a lower rate of inflation.

The Federal Reserve has said that it expects inflation to continue to decline to its two percent target. The Fed cut interest rates in September and November, explaining that it was confident that inflation would continue to decline.

Projections from Fed officials indicate that they expect to continue to cut interest rates. Democrats once agree but now they are not so sure.

In early October, the last time the Economist/YouGov survey asked about interest rates, 18 percent of Democrats said they expected higher interest rates six months from now. Twenty-eight percent said they thought rates would hold at current levels. A plurality of 33 percent expected lower rates, in line with what the Fed has projected.

The post-election survey found that 44 percent of Democrats now expect higher interest rates, 24 percent expect the same interest rates, and just 11 percent expect lower interest rates.

Republicans have swung the other way. In late October, 25 percent expected higher inflation and now just 5 percent do. Sixty-five percent expect a lower rate of inflation, up from 19 percent just a few weeks earlier. On interest rates, 59 percent of Republicans now expect them to fall, compared with 22 percent in early October.

Among independents, the moves have been less dramatic. The share expecting higher inflation has fallen from 30 percent to 25 percent and the share expecting lower inflation has climbed from 17 percent to 26 percent. The share expecting higher interest rates is almost unchanged, while the share expecting lower interest rates has climbed from 21 percent to 27 percent.