/ world today news/ Americans are increasingly worried about Biden’s inability to manage the economy
The possibility of a recession in the US economy has been discussed since the beginning of the year. It is true that a few months ago it was believed that the recession would not begin until next year. The collective West’s sanctions war has caused an inflationary rise in prices around the world. The White House declared inflation a major threat to social stability and prompted the Federal Reserve to raise the key interest rate. The increase in June was 75 basis points (the last time such a sharp increase was recorded was in 1994). The key interest rate is now 1.75%, and Jerome Powell, head of the Fed, is promising further increases.
As the summer progressed, the US Federal Reserve also began selling Treasuries and mortgage-backed securities from its portfolio. This means a contraction of the money supply. The two measures together—manipulating interest rates and selling off securities—sharply increased the risk of an economic downturn. The same Jerome Powell admitted on June 23 for the first time that he does not exclude the possibility of a recession in the country.
The head of the IMF, Kristalina Georgieva, spoke cautiously about the possibility of a crisis in the American economy. The IMF does not predict a recession, but says there will be a noticeable slowdown in economic growth. The initial estimate was for the US economy to grow by 2.9% in 2022. The revised estimates: in an optimistic scenario – 1.7%; with a pessimistic – 0.8%. K. Georgieva cautiously hinted at the possibility of a recession: “We expected the US economy to slow down. We recognize that the path to avoiding a US recession is narrowing.
The uncertainty of the estimates is predetermined by the fact that the economic policy of the Biden administration is unclear and contradictory. The sanctions dealt a heavy blow to the collective West, including the United States, in the form of unprecedented inflation.
Now in America, a serious fight is unfolding around 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, the move will further boost inflation in other Western countries.
They say the Biden administration is solely focused on the inflation problem. Recession for them is something far away. 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 at stores, gas stations and restaurants. Democrats generally see the threat of a recession as a distant cloud on the horizon that may not turn into a thundercloud not only until Nov. 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 from 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 by 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 coming our way. We just don’t know yet if it’s going to be a small one or if it’s going to be a super powerful storm.”
Elon Musk said the same thing back in May: ” Will there be a recession in the near future? Rather yes than no.” In early June, Musk announced about “very bad feeling” for the American economy.
Donald Trump’s opinion turned out to be the most resonant of all forecasts for the economic decline in the US. On June 20, he stated: “This is not something that can happen in two years… We are already in a recession.”
Trump’s statement is not outrageous. The former US president expressed what most Americans feel. On June 17, Newsweek published the results of another survey of public opinion 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 express the opinion 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 turned bearish for the first time since Joe Biden’s presidency. It gets this name when indexes fall by at least 20 percent and stay low for a sufficient amount of time. Such a decline is a signal of economic decline.
This is consistent with other public opinion polls designed to reveal Americans’ attitudes toward government and political parties. Americans are increasingly concerned about Biden’s inability to manage the economy.
Even Democrats don’t trust Biden: Just 45 percent of them gave the president a favorable 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 on the economy. The poll also showed that more than eight in 10 Republicans and nearly 6 in 10 independents gave Biden a poor rating on economic policy.
That means Democrats could lose their already shaky advantage in the US Congress in November.
And the entire international community is watching with alarm the cloud of economic recession that is sweeping America. After all, if a full-scale crisis starts in the United States, it will, as it has happened more than once, spread like wildfire around the world.
Translation: ES
#economic #crisis #begun
