Why Trump Won (Mostly)

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After a high-stakes campaign defined by economic anxiety, Donald Trump has secured a historic return to the presidency, with financial struggles pushing many Americans to support his vision of change.

About 40% of voters named the economy as their top priority, overwhelmingly backing Trump over Vice President Kamala Harris, who had taken on the role of defending the Democratic administration’s policies after President Joe Biden exited the race in July.

While the official data pointed to recovery and growth, Americans saw a different reality in their day-to-day lives, one marked by high prices, unaffordable housing, and lost opportunities.

A Disconnect Between Data and Daily Life

For months leading up to the election, the Biden administration promoted its accomplishments: a resilient job market, a steady GDP growth rate, and legislative victories on manufacturing, climate change, and infrastructure. But beneath the headline numbers, a sense of frustration lingered.

Though unemployment sits at a low 4.1% and jobs continue to be added each month, Americans’ struggles to manage basic costs persisted, overshadowing these indicators. Rents remained unaffordable for many, with nearly half of renters devoting over 30% of their income to housing.

Meanwhile, mortgage rates held near 7%, locking many out of homeownership and pushing home sales to their lowest turnover in three decades.

“When housing is out of reach and bills are hard to manage, it’s tough to feel good about the economy, no matter what the data says,” Mark Zandi, chief economist at Moody’s Analytics, told The Wall Street Journal.

Inflation’s Lingering Impact

Poll after poll highlighted this disconnect, showing that many voters didn’t share the administration’s confidence in the economic numbers. Grocery prices, in particular, remained a hot-button issue, with families paying significantly more for essentials than they did before the pandemic.

A surge in inflation during the Biden administration left prices roughly 20% higher than they were when Trump left office, casting a shadow over recent declines. Despite drops in gas prices from their record highs in 2022, household expenses remained elevated across the board, pushing everyday Americans to the financial edge.

This ongoing struggle undermined the “happy talk” from Democrats, as Trump’s promises of economic relief, including tax cuts on Social Security, tips, and overtime pay, resonated with voters’ daily struggles.

Trump’s Economic Message Strikes a Chord

At the heart of Trump’s campaign was a promise to make inflation “vanish completely” and restore control over the economy. His return to populist messaging emphasized the plight of working-class Americans and a shrinking middle class that no longer feels it can rely on a college degree or stable job to ensure economic security.

This message found receptive ears among voters in regions hit hardest by the decline of domestic manufacturing, with residents from the Rust Belt to the Midwest rallying around Trump’s vow to bring back well-paying blue-collar jobs.

“We are so tired,” Amanda DiAntonio, a 36-year-old hair stylist from Henderson, Nevada, told The Journal. “Everyone we know is so tired, like somebody’s foot has been on the American people’s chest for the past four years.”

Harris’s Counterattack and Struggles to Connect

Vice President Harris countered Trump’s promises with her agenda, emphasizing policies aimed at reducing grocery costs, addressing housing affordability, and supporting middle-class families.

She reversed her stance on border security, proposing stricter immigration controls in response to growing public sentiment. But Trump’s attacks — calling her a “failed” leader and a “dangerously liberal” politician — undercut her appeal among voters who had already grown wary of Democratic policies.

His portrayal of Harris as responsible for high costs and lost opportunities found traction among those feeling increasingly disillusioned with what they saw as a distant, ineffective administration.

Wall Street’s Response to Trump’s Win

Following Trump’s victory, Wall Street responded with a wave of enthusiasm. U.S. stocks surged by $1.62 trillion on Wednesday, marking the fifth-largest single-day increase on record, as investors anticipated tax cuts, deregulation, and renewed opportunities for growth.

Financial companies led the charge, with the KBW Bank Index soaring 11% as markets prepared for a potential rollback of regulatory oversight. “Investors are celebrating,” said Jack Ablin, chief investment officer at Cresset Capital. “We’re expecting Trump’s policies to boost economic expansion and free up opportunities in sectors that have been constrained under the current administration.”

Mergers in the banking sector, stalled by regulatory obstacles in recent years, are also expected to rise under Trump’s new term, according to prominent investors like Carl Icahn, who remarked, “That’s going to change.”

Everyday Struggles Highlight Growing Wealth Disparity

Yet for most Americans, the optimism on Wall Street was worlds away from the struggles they faced at the grocery store, at the gas pump, and when paying their monthly rent. Even among households earning over $150,000 annually, one in five were reportedly living paycheck to paycheck.

While GDP growth outpaced all other G7 nations and unemployment remained low, people increasingly felt shut out from the prosperity these numbers promised. High home prices, rising rents, and long-term inflation left many doubting whether the American Dream was achievable at all.

Bridging the Gap Between Policy and Reality

The contrast between official figures and lived experience revealed a deeper divide in the American public: While statistics showed an economy adding jobs and increasing consumer spending, many Americans felt these metrics bore little relevance to their own lives.

Harris’s policies, aimed at lifting the middle class and addressing cost-of-living challenges, were overshadowed by a broader perception of economic stagnation that Trump seized upon. His promise to make America’s economy work for “ordinary Americans” struck a chord with those feeling left behind.

The election outcome suggests that for many, the economy remains more than a set of figures; it is a lived experience that shapes daily life and future aspirations. When wages don’t keep pace with prices, and homeownership feels out of reach, even the most optimistic economic indicators fail to connect with the public.

Trump’s return reflects the power of that sentiment, highlighting the challenges the administration now faces in bridging the gap between policy and reality for millions of Americans.

Inflation: A Worrying Elephant in the Room

However, while Trump’s promises of tax cuts and deregulation may have appealed to voters, some of his more radical proposals, like mass deportations and massive tariffs, could ironically fuel inflation rather than curb it. Experts warn that these policies could actually backfire, leading to even higher prices for everyday consumers.

Ryan Sweet, chief U.S. economist at Oxford Economics, emphasized that inflation remains a top concern for voters, particularly those who felt the squeeze on their budgets.

"The lesson of this election shouldn’t go unnoticed by Republicans – inflation doesn’t sit well with voters, and they won’t forget," Sweet told CNN. While Trump’s rhetoric centered on combating high prices, his proposed policies could inadvertently increase costs, exacerbating the very issue that propelled him back into power.

Currently, it remains unclear how many of Trump’s campaign promises will be implemented. Wall Street seems largely unconcerned by the potential inflationary effects of Trump’s plans.

Investors appear to believe that Trump may soften his approach once he begins the business of governing, especially when it comes to his more extreme proposals like imposing tariffs on all $3 trillion of U.S. imports or deporting millions of undocumented workers.

Given the history of presidential candidates moderating their policies after elections, there’s a chance that many of these plans will remain unfulfilled.

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This is the lead story to our latest edition of The Rising Tide. Seven more stories follow. For full access, subscribe here (not LinkedIn.)

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