Puzzle this out: When Joe Biden was still the 2024 presidential candidate, voters were fed up with inflation and Biden polled poorly. Republican presidential nominee Donald Trump held enough of a lead over Biden in mid-July that financial markets started to price in a full Republican sweep of the White House and Congress come November.

Less than a month later, Biden has dropped out, replaced at the top of the Democratic ticket by Vice President Kamala Harris. Inflation is basically the same as it was a few weeks ago: gradually improving but still too high. Yet Harris has rocketed ahead of Trump in the polls, and betting markets now give Harris better odds of winning than Trump.

Are voters giving Harris a pass on inflation? Or is it something else?

Inflation isn’t the only factor in the election, of course. But it has been Biden’s biggest economic liability, with the high prices of the last few years eroding purchasing power and bumming out voters. When an incumbent president runs for reelection, it’s almost always a referendum on his handling of the economy.

One explanation for Harris outperforming Biden could be that voters blame Biden much more than Harris for inflation. That would suggest limits to the incumbency theory of blame for economic woes: Voters might blame the main incumbent — the president — but lesser incumbents, not so much.

It’s also possible that voters’ poor opinions of Biden are more personal and less a reflection of the economy than many analysts have guessed. It’s never 100% clear why voters like or dislike a president. Voters soured on Biden as inflation worsened in 2022 and 2023, so it seemed one caused the other. But maybe voters who sent Biden to the White House in 2020 have simply fallen out of like with him as he’s aged and slowed down, and their views aren't that connected to the economy.

This is more than just a political parlor game. At the moment, Harris seems to be enjoying a best-case outcome for Democrats: A fresh presidential candidate not encumbered by the worst parts of Biden’s record. It might last. In the latest Yahoo Finance Capitol Gains podcast, Tobin Marcus, head of policy for Wolfe Research, points out that in 2022, when inflation was close to its peak, Democrats outperformed in the midterm elections, losing far fewer seats than is normal for the president's party.

"In 2022, when inflation really was running out of control, voters said in exit polls that was the No. 1 problem," Marcus says. "But it didn't sink Democrats. When you looked at voters who said, 'The economy's not so good,' they still voted for Democrats in numbers similar to the overall electorate."

If Harris can shake Biden's inflation curse, it could represent a crucial Democratic reset with voters. Biden enjoyed a 55% approval rating during his first month in office. The first big dent in that came with the botched withdrawal of US forces from Afghanistan in August 2021, which left 13 American service members dead in a suicide bombing. Biden’s approval fell further in 2022, when inflation hit 9% and gasoline prices crested $5 per gallon for the first time ever. Biden’s approval never recovered.

Harris’s approval rating was around Biden’s depressed level one month ago. But her approval is now rising. In polling by The Hill, her approval rating has jumped 10 points since the end of June, to 47%. Americans who didn’t know much about Harris seem to like what they’ve seen during the last few weeks as she has suddenly become the center of attention in the political world.

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For the last two years, Republicans have tried to link inflation directly to Biden, calling it “Bidenflation.” But the same charge might not stick to Harris. Nobody called inflation "Harrisflation," and by now, it might be too late. Trump seems more focused on trying to brand Harris as a California liberal and questioning her racial identity.

If Harris does outrun the inflationist label, the economy could break her way during the last couple of months before the election. Inflation concerns that have dominated markets for the last two years are now yielding to worries that the economy may be softening too much. But that’s exactly what the Federal Reserve has been trying to do, through a series of abrupt rate hikes in 2022 and 2023. It actually looks like it’s working.

The early-August stock market sell-off has partially reversed, and traders are adapting to a new environment in which they expect the Fed to be cutting rates as hiring and spending slows. Unless there’s a surge of layoffs, which economists don’t expect, consumers seem bound to benefit from lower borrowing costs and stable prices through the end of the year, with some things getting cheaper.

Harris’s rise won’t continue unabated. Her honeymoon period will end, she’ll have to start answering tough questions about where she stands on key issues, and she’ll probably make a few mistakes. But if she’s free of the inflation leash that kept Biden corralled, she’ll have a much better chance than her current boss of winning in 2024 based on what she does between now and Election Day.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on X at @rickjnewman.

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