The New York Times released on November 10th that Democrats lost fewer chairs in the House and Senate than pollsters anticipated. In response, President Biden feels confident about the approximately $1 trillion worth of government programs geared towards a transition away from fossil fuels and increasing domestic manufacturing. Considering the decrease in the rate of inflation that came out in October (7.7%, a significant decrease from the September statistic of 8.2%), many are hopeful for a continued trend, but that is unlikely as the fourth quarter is typically the quarter with the high recorded GDP each year. A continued increase in aggregate demand will, unfortunately, continue to be paired with high inflation only further exacerbated by the increase in government spending. Finally, the Fed has continued to increase interest rates and appears to have no intention of slowing this process until the unemployment levels settle back to a more realistic rate.
https://www.nytimes.com/2022/11/10/us/politics/biden-economy-midterms.html
Hello Brittani,
ReplyDeleteIt is very true that inflation is not at a very realistic rate at the moment. It is very high and has been for about 5 months now and the federal reserve is doing what they can to lower it in the short run. Jerome Powell has a goal of 2% inflation levels over the year and the current inflation rate far exceeds that already. In order to combat this inflation the federal reserve has been raising interest rates month after month with their last increase in the beginning of November. Given what i've learned from the economic outlook conference, I believe that interest rates will increase at-least one more time in December. This will show for another decrease in inflation in the short run, and then I fully expect them to start lowering the IR with time. Overall good job!
Typically in a president's first midterm election since the beginning of their term, their party does not do well and generally the other party can win a majority. This was not necessarily the case this cycle and the Democratic party performed far better than expected as you mentioned. The results of this election will allow Biden to continue with his economic plan without having to face as much backlash from Republican-majority house/senate as predicted. It will be interesting to see if Biden's government programs have the effect he expects them to.
ReplyDeleteDo you think midterm results will impact inflation?
ReplyDeleteIn my opinion, the unemployment levels we are seeing in the United States have been at a very reasonable rate since the beginning of 2022. I believe it is likely the Fed will continue to raise interest rates until we establish a downward trend in inflation. Great post!
ReplyDeleteOverall great post! I think that it will be interesting to see how the Biden administration will address these issues.
ReplyDelete