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Biden’s inflation laser eyes take aim at Powell

May has even happened? It certainly seemed like a month of turmoil and action for the markets, but we can’t help but notice that stocks ended up pretty much where they started this month. The S&P 500 was down about half a percentage point from the first trading day in May to the last. The Dow Jones Industrial Average moved two tenths of a percentage point.

Some evidence can be found in the oil market that the world didn’t really stop in May. West Texas Intermediate rose from around $105 to $115, despite the Biden administration’s policy of using the strategic oil reserve to try to keep prices down. Gasoline prices set at least half a dozen records in the last half of the month. The folks at AAA say it might have been the calm before the storm. Now that the summer driving season has begun, oil and gasoline prices are expected to rise further.

This will undoubtedly make Americans even less confident in the economy and the Biden presidency. Gallup’s latest economic sentiment poll showed that only 1% of Americans think the economy is great. Only an additional 13% say it’s good, compared to 20% in April. Thirty-nine percent say things are “only fair” and a staggering 46% say economic conditions are “bad”. Hope is fading fast: 77% say they expect things to get worse. Only 20% think things will be better by the end of the year.

Gallup likes to ask the public to name the most important problem facing the United States without prompting them to make their choices. For decades, only about one percent of people responded to inflation. Now it’s up to 18 percent. Twelve percent mention the economy more generally. The one issue receiving more attention: political leadership.

It’s very clear that people really hate inflation with a rare intensity. He is able to lower their view of the overall economy even though unemployment is at multi-decade lows and a majority of people tell pollsters from the Conference Board’s Consumer Sentiment Survey that there are many jobs. Why is inflation so powerful? The simplest answer is that it is inevitable and universal. It’s a drain on almost everyone’s bank account, while even truly terrible unemployment only directly ensnares one in five people in America. It’s not like you can take time off or go back to school to avoid high prices.

A Trafalgar Group survey released on Tuesday showed nearly 60% of Americans say Biden’s policies are a major contributor to inflation. Among Republicans, 87.9% blame Biden. Among the self-employed, 61.1% do so. Even among Democrats, a third blame Biden’s policies and spending. (Fifty-five percent of Democrats blame Putin’s war.)

President Joe Biden meets with Federal Reserve Chairman Jerome Powell in the Oval Office of the White House on May 31, 2022. (AP Photo/Evan Vucci)

The Biden administration is aware that inflation is a serious political problem for Democrats, and so it is once again trying to shift the blame elsewhere. The story of corporate greed has basically been mocked to death, even by leftist economists and analysts. Putin’s price hike narrative persuaded a majority of Democrats but no one else. Now, it looks like Federal Reserve Chairman Jerome Powell could be the next fall guy.

“Chair Powell and other Fed leaders noted right now that they were laser-focused on fighting inflation, as was I,” Biden said in remarks to reporters as he walked. was sitting with Powell. It sounded friendly enough on paper, but Powell has been around long enough to probably know what’s coming. In any case, Powell still has at least four more years as Fed chairman and is likely convinced that Biden has less than that as chairman ahead of him.


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