Yes, the United States follows a public policy based on capital markets, credit, and voluntary into contracts. The government cannot compel market activity, although it attempts to create a narrative that encourages spending and entering market transactions, i.e., the purchase of health insurance.
But taking credit for managing an economy beyond what policy and the law says you can do only sets the stage for an administration to attempt undue interference in the economy.
Effective federal funds rate: 3.08% Overnight bank funding rate: 3.07% Secured overnight financing rate: 3.00% Broad general collateral rate: 2.99% … More
Politically, Mr Biden needs the markets’ forward looking indicators to be off. In seven weeks the Democratic Party will be tested in the mid-term elections. Mr Biden is counting on an argument that he is the steward for a recovering economy and that he will need majorities in the House and the Senate to continue his inflation reduction agenda.
For traders, I would expect that increased short term rates will make the dollar more attractive and politically will find Mr Biden having to spin a new and positive narrative around rising rates.
Stacey Abrams and Brian Kemp should either remain silent on inflation or at, maximum, learn the causes of inflation and share that knowledge with voters. What they are proposing in terms of spending and taxation provides political optics and nothing more.
Politically, labor markets will continue to take on some importance, but as the structure of labor continues to change in the face of the growing value of financial assets, labor will play a less important component in determining the strength of the economy.
Labor will be the next “to what end” question.
Today, President Joe Biden heaped praise on Senator Joe Manchin, Democrat of West Virginia, and Senate Minority Leader Mitch McConnell, … More
Today, Mr Powell may have signaled some coordination on recession messaging, but if the CPI numbers do not signal some kind of respite for the consumer, Mr Powell may find himself thrown under the political bus.
NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the April 2022 Public Policy Survey, which is … More