WASHINGTON (NEWSnet/AP) — Even President Joe Biden has some regrets about the name “Inflation Reduction Act.” Approaching its first anniversary after passage, it has become clear that curbing prices in the short-term wasn’t the point.

Although the inflation rate has dropped from 9% to 3.2% over the past year, most economists say little to none of that is directly connected to the law.

“I can’t think of any mechanism by which it would have brought down inflation to date," said Jason Furman, an economist at Harvard University.

Alex Arnon, an economic and budget analyst for University of Pennsylvania’s Penn Wharton Budget Model, offers a similar assessment.

“We can say with pretty strong confidence that it was mostly other factors that have brought inflation down,’’ he said. "The IRA has just not been a significant factor.’’

When the Inflation Reduction Act was proposed, the Congressional Budget Office said its impact on inflation would be negligible.

So why the name choice? Eventually, it may help to hold down prices, and it fit the politics of the moment.

The law is at the core of Biden's pitch to voters going into the 2024 presidential campaign. But with inflation less of a pressing concern, the president is putting more emphasis on its provisions aimed at combating climate change, creating jobs and lowering people’s health care bills.

“I wish I hadn’t called it that because it has less to do with reducing inflation than it has to do with providing alternatives that generate economic growth,” Biden said Aug. 10 at a fundraiser in Utah.

If IRA doesn’t deserves credit, what did cause inflation to tumble?

Economists are listing three major reasons:

Oil and gasoline prices fell from their 2022 peak. Gas cost had spiked 60% in June 2022, caused in large part by Russia's invasion of Ukraine. Prices dropped steadily until January, then began to climb, but haven’t returned to the previous peak.

The Fed aggressively raised its benchmark interest rate. That made it more expensive to borrow and decreased demand that had increased prices. The Fed's rapid hikes have nearly doubled average mortgage rates, pushing down home sales.

Supply chain delays that started during the pandemic began to ease.A measure of supply chain challenges constructed by Federal Reserve Bank of New York has fallen below even pre-pandemic levels as shipping costs have declined.

Big changes in inflation rate are, primarily, “global shocks,” said Kristin Forbes, an economist at MIT and a former member of the Bank of England’s interest-rate setting committee. “Those are the primary drivers, but not the only ones. What the Fed has done has also contributed, without a doubt.”

Biden has been careful not to declare an outright victory against inflation, since it's still higher than the Fed's 2% target. But the White House says cost savings from the Inflation Reduction Act are coming as the law is enacted.

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