FEARS OF DOWNTURN POINT DEMS TO MIDTERM OBLIVION
The White House and Wall Street seem to be in accord that the shrunken gross domestic product in the first quarter of this year is a fluke driven by increased imports and the vagaries of the supply chain.
But when Washington tells you, as the saying goes, that “the fundamentals of the economy are strong,” it’s always a good time to make sure you’ve got plenty of canned goods in the root cellar. So, of course, this is the moment when the Federal Reserve is set to blunder in with interest rate hikes to counteract an overheated economy caused in part by its previous blunder of over-pumping.
Right now, Democrats are heading for an electoral drubbing as inflation intensifies the midterm curse for President Biden. And it’s happening with a fast-growing economy. If the optimists who say that the first-quarter contraction was a mirage and that the Fed can curb inflation by intentionally slowing down the economy just maybe happen to be wrong, then imagine what a flogging Dems are in for. A fresh recession or even a stagnant economy combined with inflation would multiply the political pain enormously for the majority party.