A couple of articles on the current macro US picture I've been very curious to see what the Fed does as we approach the presidential elections. Generally, when there's an incumbent, the Fed recklessly stimulates the economy until after the election. This cycle though, it seems like the establishment has been looking for an off-ramp from Biden. Maybe we won't see a huge stimulus program this time.
U.S. GDP Hides Weakness Behind Massive Debt By Daniel Lacalle "The worrying fact is that this rise in consumption comes mostly from higher debt, as United States consumers are borrowing heavily to spend. Americans are living on borrowed time as real salaries remain in negative territory in the past five years and inflation eats savings away."
The Fed Has No Plan, and Is Just Hoping for the Best By Ryan McMaken "Contrary to the longstanding myth of Fed independence and political neutrality, the Fed is a deeply political organization committed to kicking the can down the road to get the regime through just one more election without a fiscal or monetary disaster."
Biden administration already used the SPR lever and has ran into a lot of challenges with their student loan forgiveness attempts. It will be interesting to see what they try to do to secure the election victory and if the Fed stays firm of capitulates under political pressure.
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There are people who think they intentionally chose a student loan forgiveness plan that would get shot down by the courts. Biden's always been on the side of creditors and student loan payments are a big chunk of government revenue.
If he wanted to get credit for that stupid policy, without having to live with the consequences, that was the way to do it.
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Makes sense. Reminds me of the Blue Jays offseason strategy. The media tells the fanbase they are in on player x or trading for player y. It never comes to fruition but then they can say we are doing a lot to try and improve the team we were so close on all these guys. Haha,
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It's a fine line to walk. The Raiders former GM leaked to the press how they were really close to moving up for CJ Stroud. I guess the idea was that he wanted credit for identifying talent after CJ had gotten off to this historic start, but it was interpreted as a really costly failure of asset management.
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My apologies for soiling meta Econ takeover with sports takes. Haha.
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#StrongerTogether
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