(John Ransom, Headline USA) Preparing for what might be in historic rout in the 2022 midterm elections, President Joe Biden is working on his ready-made excuse for why the economy and the Democrats are doing so poorly: it’s the Federal Reserve’s fault.
So far the only thing that Biden has said is that he ordered Powell to crash the markets to lower inflation
— zerohedge (@zerohedge) January 19, 2022
“The critical job of making sure elevated prices don’t become entrenched rests with the Federal Reserve, which has a dual mandate: full employment and stable prices,” explained Biden.
Biden’s latest strategy comes as the stock market extended its losses, making January 2022 the worst performance since the March 2020 crash that happened as the pandemic first took hold, according to ZeroHedge.
“Monday’s pullback put the S&P 500 down more than 11% this month,” said CNBC, “on pace for its worst monthly decline since March 2020 and worst January performance ever.”
ZeroHedge said Biden’s comments were an attempt to apportion blame for upcoming Democrat losses in the House and the Senate to the Federal Reserve raising interest rates.
As inflation has spiraled out of control amidst outsize Democrat spending and large-than-necessary stimulus measures, the economy has also stumbled, with Wall Street companies posting lesser-than-expected earnings in some key industries.
“While more than 74% of S&P 500 companies that have reported results have topped Wall Street estimates,” said CNBC, “a couple of key firms let down investors last week, including Goldman Sachs and Netflix.”
From aluminum cans, to jet fuel, inflation is putting pressure on corporate profits said the Associated Press.
Aluminum cans used for soda, for example, have surged 60% this year, forcing one beverage maker to consider raising prices again.
“We’ve got inflationary pressures all around,” Hilton Schlosberg, co-chief executive officer of energy drink maker Monster Beverage Corp (MNST.O), said on a recent investor call according to the Associated Press.
As inflation proceeded to devalue dollars, many Americans had tied any extra income in the markets, hoping to hedge against the economic turmoil. But the Fed’s threat to raise interest rates and stop special stimulus measures that have helped prop up the economy have now driven down portfolios in stocks and other assets also, ensuring a heavy toll for all.
A rising interest rate environment will be especially hard on growth and technology stocks, which are often counted on to increase productivity in the US workplace.
“Strategists expect the adjustment to higher yields to result in stock market volatility and lower valuations for growth and tech stocks,” said CNBC.
Consumer confidence has dropped to the lowest levels since 2011 said the University of Michigan consumer confidence index.
The result will be tough sledding for the Democrats in the 2022 election, the fault of which Biden will try to pawn off on the Federal Reserve.
