Given current trends, the same label may be applied to the year 2022, as inflationary pressures in the U.S. consume consumers at a rate not seen in decades, souring the political fortunes of a U.S. president barely a year into his term. It is also conspiring to make a tough job even harder for the Federal Reserve chairman he suggests for a second term.
It is time to say sayonara to the environment of tame inflation investors and consumers that were once taken for granted. He said they just have to stop increasing.
Bond king Jeff Gundlach, who has taken up the baton of Wall Street s Dr. Doom from Noriel Roubini, said this week that he sees recessionary pressure building, even though strong demand inflates prices, a tight labor market and higher wages are far more likely than not to keep supporting insatiable demand.
It is why economists are constantly evaluating how aggressive the Fed might get as it embarks on its first tightening campaign since 2018.
On Wednesday, Capital Economics chief U.S. economist Paul Ashworth said that December s price data was every bit as bad as expected. We expect the Fed to hike interest rates in March, with four 25 bp hikes this year and another four in 2023. The call puts him squarely in the camp of JPMorgan Chase CEO Jamie Dimon, who predicted that the central bank would have to hike more aggressively based on uptrends in growth and prices.
Which brings us the two most vulnerable individuals to the Annus horribilis I mentioned earlier — Fed Chair Jerome Powell and President Joe Biden. The latter s signature legislation is stalled in Congress, which is a good thing since more government spending would almost certainly add to the problem and he is already taking heat for surging prices and bare shelves created by the port backlogs.
I wrote at the time that
Therein lies a reason why Biden is moving to address spikes in food and energy costs as a result of the impact of inflation on consumers, as stated by Yahoo Finance spokesman Ben Werschkul on Wednesday.
The shockwaves from high prices are already reverberating across the political landscape, with voters in an increasingly foul mood. In an analysis, Eurasia Group s Jon Lieber noted that backlash against Biden has only intensified in recent months, and his policy initiatives are either unpopular or have become lost due to the ongoing pandemic and high inflation. It gets worse. Lieber said that the backlash has led to an increase in the odds that Republicans take the House to 90%, up from 80% previously.
This is an exceptionally high degree of confidence this far out from an election, but the historic median 30 seat loss for the party in power, the current narrow margin in the House, redistricting patterns, 26 Democratic retirements in the House, and persistent low approval ratings for Biden support the view, Lieber said.
It bearsmentioning that the last president to preside over core inflation readings this high was President George H.W. We all know what happened to him the next year.
Editor at Yahoo Finance, Javier E. David. ET: Producer Price Index PPI month-over-month, December 0.4% expected, December 0.8%, November None 8: 30 a.m. ET: PPI excluding food and energy, month-over-month, December 0.5% expected, 0.7% in November None 8: 30 a.m. PPI is expected to be the year-over-year, December 9.8%, November 9.6%. ET: PPI excluding food and energy, year-over-year, December 8.0% expected, 7.7% in November None 8: 30 a.m. EST: Initial jobless claims, week ended Jan. 8 200,000 expected, 207,000 during the prior week. None 8: 30 a.m. ET: Continuing claims, week ended Jan. 1 1.733 million during the previous week 7: 25 a.m. Delta Air Lines DAL is expected to report adjusted earnings of $0.225 per share on revenue of $8.452 billion.
ET on his administration's whole-of-government COVID 19 surge response. The speech came as Biden's vaccine or testing mandate for large businesses appeared to be in trouble at the Supreme Court.
The White House is hosting a number of technology companies — Amazon and Oracle — to discuss the security of open source software. The meeting came after a vulnerability in an Apache logging library called Log 4 j opened up hundreds of popular applications and services to hacker attacks.
It is not on Capitol Hill and it is confirmation hearing for Lael Brainard. She will answer questions at 10: 00 am ET on her nomination to serve as the Vice Chair of the Board of Governors of the Federal Reserve System.
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