Source: Bloomberg
Author: Justin Sink, Christopher Condon
The November election is getting closer and closer, but the inflation data has brought a double blow to the political prospects of President Joe Biden for three consecutive months.Worries have also postponed the public's hope of paying interest rates from the Federal Reserve predicted by Biden.
Bynden hopes that after the epidemic has stabilized, the price pressure relief, and the employment market is still strong after selling the epidemic.But after the release of the inflation report on Wednesday, he acknowledged that inflation is still becoming more and more tense.According to data released on Wednesday, the prices of consumers without food and energy in March rose 3.8%year -on -year.
"Although the price of key lifestyles such as milk and eggs is lower than one year ago, the price of housing and food grocery is still too high," Biden said in a statement.
In addition, it is increasingly difficult to imagine that the Federal Reserve cuts interest rates before the presidential election, and the interest rate cut will inject more motivation to the stock market, making it easier for Americans to buy housing and car and repay debt.
The two -year US Treasury yields have soared, and the main sectors of the S & P 500 index have fallen, indicating that investors are skeptical of the Fed's interest rate cut in June.However, if the Federal Reserve cannot cut interest rates by July, a meeting will be in September.
Some economists believe that the Federal Public Marketing Committee would rather wait until the election before acting to avoid leaving a impression that people try to affect the election results.
"One of Powell's duties is to protect the public image of the Federal Reserve," said Vincent Reinhart, chief economist of Dreyfus and Mellon."The closer to the election of the FOMC operation, the more likely the public will question the intention of the Federal Reserve."
This is a bad news for Biden.He re -elected to rely on the support of swing voters in the suburbs, and these voters have witnessed the surge in mortgage interest rates during their term of office.Biden has repeatedly made the Federal Reserve's predictions in recent weeks, and various activities have held various activities that the government proposed to solve the rise in housing costs.
In view of the continued lagging behind President Donald Trump in polls, Biden could not bear the Americans' views on economic prospects further.Although Biden has maintained a strong employment throughout his term, including more than 300,000 new non -agricultural employment in March, high inflation has exacerbated the anxiety of voters.
According to Bloomberg News/Morning Consult last month's public opinion survey of Swing State, he stated that the proportion of voters with a better personal financial situation during Trump's term was 16 percentage points.More than one -third of the respondents said that the economy is the most important problem for them, and the proportion of voters who say that the economy is in the correct track is less than one -third.
Trump posted on its Truth Social platform on Wednesday morning to try to expand its advantages.
"The inflation is coming, and the momentum is aggressive! The Fed will never be convincing to reduce interest rates because they want to protect the worst president in American history," Trump said.
At the same time, Trump's Maga Inc. Super Political Action Commission issued an email with the theme "Biden's Inflation Crisis".
Since the June 2022 CPI has seen the top 9.1%, the inflation situation has been greatly improved.In addition, according to the tracking data of Atlanta's Federal Reserve's wage growth, the median wage has increased by 5%in the year of February, helping many Americans keep up with the pace of price increase.
However, James Knightley, chief international economist at the Dutch International Group, pointed out other aspects of Bayiden.Last year, the cost of living costs of federal benefits such as social security was 8.7%, helping retirees to resist inflation.He said that this year is only 3.2%, and the employment market is showing signs of slowing down.
"Employment leading indicators do not seem good," he said."If the unemployment rate also starts to rise, and the inflation rate remains high, it is a real toxic combination for Biden."
