Americans increasingly worried about Biden’s inability to run the economy
The likelihood of a recession in the US economy has been under discussion since the beginning of the year. It is true that a few months ago it was thought that the recession would not begin until next year. The sanctions war in the collective West has caused inflation to rise worldwide. The White House declared inflation a major threat to social stability and forced the Federal Reserve to raise key interest rates. The increase in June was 75 basis points (the last time such a sharp increase was registered was in 1994). The key interest rate is now 1.75%, and Jerome Powell, head of the Fed, promises new increases.
With the onset of summer, the US Federal Reserve also began selling treasury and mortgage securities from its portfolio. This means shrinking the money supply. The two measures together – interest rate manipulation and the sale of securities – have sharply increased the risk of economic downturn. Jerome Powell admitted for the first time on June 23 that he did not rule out the possibility of a recession in the country.
The head of the IMF Kristalina Georgieva spoke with caution about the possibility of a crisis in the US economy. The IMF does not predict a recession, but says there will be a significant slowdown in economic growth. The initial estimate was for the growth of the US economy in 2022 by 2.9%. Revised estimates: in an optimistic scenario – 1.7%; with pessimism – 0.8%. K. Georgieva cautiously hinted at the possibility of a recession: “We expected the US economy to slow down. We realize that the road to avoiding a recession in the United States is narrowing.
The uncertainty of the estimates is determined by the fact that the economic policy of the Biden administration is unclear and contradictory. The sanctions dealt a severe blow to the collective West, including the United States, in the form of unprecedented inflation.
A serious struggle is unfolding in America over Joe Biden’s initiative to ban the export of oil and petroleum products from the country in order to lower gasoline prices in the United States. However, this move will further stimulate inflation in other Western countries.
They say the Biden administration is focused solely on the problem of inflation. The recession for them is a distant thing. The midterm elections for the US Congress and state legislatures will be held on November 8, and according to Biden’s team, the mood of the electorate is largely determined by prices in shops, gas stations and restaurants. Democrats generally see the threat of recession as a distant cloud on the horizon that may not become a thundercloud not only until November 8, but also until the 2024 presidential election.
Meanwhile, most experts tend to believe that the crisis will begin this year. Among them are authorities such as Wall Street banking analysts at Goldman Sachs and New York University professor Nouriel Roubini, who predicted the global financial crisis in 2008.
On June 1 (before the last increase in the key interest rate from the Fed), the head of the largest American bank JP Morgan Chase, Jamie Dimon, speaking at a financial conference in New York, expressed serious concern about the clouds gathering over the US economy: “This hurricane … is approaching us. We just don’t know yet if it will be small or a super powerful storm. “
Elon Musk said the same thing back in May: “Will there be a recession in the near future?” Yes rather than no. ” In early June, Musk reported “very bad feeling” for the American economy.
The most resonant of all forecasts for the economic downturn in the United States was the opinion of Donald Trump. On June 20, he stated: “It’s not something that could happen in two years … We’re already in a recession.”
Trump’s statement is not scandalous. The former US president has expressed what most Americans feel. On June 17, Newsweek published the results of another public opinion poll in the country. The survey was conducted as part of the IBD / TIPP economic optimism index assessment. The value of this index in June is as follows: 53% of Americans believe that their economy has already entered a recession, another 25% of respondents find it difficult to assess, and only 20% of respondents believe that there is no recession in the country.
Compared to May, there is an increase in pessimism. Newsweek explains this with the following reasons: in late May – early June, inflation reached a 40-year high; The Dow Jones fell below 30,000 in mid-June for the first time in a year and a half. In June, the US stock market became a bear for the first time since Joe Biden’s presidency. It gets this name when the indices fall by at least 20 percent and remain low long enough. Such a decline is a signal of an economic downturn.
This is in line with other opinion polls that aim to reveal Americans’ attitudes toward government and political parties. Americans are increasingly concerned about Biden’s inability to run the economy.
Even Democrats don’t believe Biden: Only 45 percent of them gave the president a positive rating, according to the poll, a sharp drop from the same period last year, when 80 percent of Democrats thought the president was doing well in the economy. The poll also found that more than eight out of 10 Republicans and nearly 6 out of 10 independents gave Biden a poor economic policy rating.
This means that in November, Democrats may lose their already volatile advantages in the US Congress.
And the entire international community is watching with concern the cloud of economic recession sweeping America. Eventually, if a full-scale crisis breaks out in the United States, it will, as has happened more than once, like a wild forest fire, begin to spread around the world.
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