Fortunately for Mr Biden’s political economy, the vast majority of Americans have no where else to go. Being a digital nomad may be an option for a number of Americans, but even as foreign exchange rates between the US dollar, the pound, and the euro flirt with parity, Mr Biden realizes he has a captive audience that will opt for the greater availability of resources here in the U.S.
While Jerome Powell, chairman of the Federal Reserve System, has admitted that there will be pain along the way as rates tighten to combat inflation, President Biden has not been as definitive about the expected stress Americans are expected to bear should increased rates result in business cycle downturn and layoffs.
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.
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.
HR 2543 serves no other purpose but to rile up Senate Republicans and make them the scape goat for failed policy.
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