Joe Biden, Democrats celebrate while markets drop

If anyone has worse political instincts than Joe Biden, I haven't met that person. Biden attended a South Lawn celebration for the Inflation Reduction Act on a day when the August CPI report came in hotter than expected at 8.3% year-over-year. That caused the stock market to drop like the Hindenburg. At the end of the day, the DJI dropped 1276 points. The NASDAQ dropped 632 points, which represents a 5% drop of the NASDAQ.

According to this Reuters report, "Appearing with congressional allies and iconic singer-songwriter James Taylor, Biden held a White House event Tuesday to celebrate the Inflation Reduction Act. The bill is the most ambitious attempt by Biden and congressional Democrats to tackle the runaway cost of living before the midterm elections. But critics seized on data showing another month of unusually high inflation that caused stocks to tank."

Yesterday was the 4-week 'anniversary' of Biden signing the bill into law. Initially, the bill was hailed as having $350,000,000,000 worth of deficit reduction. Penn-Wharton, the CBO and the Committee for a Responsible Federal Budget disagree.

In his daily opening riff, Larry Kudlow said "The Atlanta Fed's wage tracker is up 6.7%, but real wages had their 17th-straight negative month. In other words, middle-class working folks are getting clobbered, absolutely clobbered. They're working more but buying less." Meanwhile, while Biden celebrated another terrible CPI report, CNN cut away from the speech:

While Biden bragged about his accomplishments, the stock market ticker showed the Dow down 1,217 points. If the Ticker had a name, it might've been titled 'Biden meets reality.' Kudlow continued, saying this:
Meanwhile, the stock market has fallen nearly 1,300 points. The 10-year treasury rate has jumped over 3.4% and the 30-year fixed mortgage rate stands at 6.5%. Those are a full percentage point above where they were a month ago. Those are the facts. What does this all mean?

The Federal Reserve will be much more aggressive in hiking their target rate and draining excess cash in the economy. They ought to raise the Fed funds rate a full percentage point next week and another percentage point in November and then a third percentage point in December in order to stop the inflation tide. This is a painful wage-price spiral. We haven't seen one of these for four decades.

What this likely means is that families will continue hurting until we get a new (Republican) president working with the Cavalry, which we hope is elected this November.

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