{"id":2221034,"date":"2024-04-15T03:28:02","date_gmt":"2024-04-15T07:28:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-threat-to-biden-rising-odds-of-no-rate-cuts-before-election\/"},"modified":"2024-04-15T03:29:52","modified_gmt":"2024-04-15T07:29:52","slug":"new-threat-to-biden-rising-odds-of-no-rate-cuts-before-election","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-threat-to-biden-rising-odds-of-no-rate-cuts-before-election\/","title":{"rendered":"Fresh challenge for Biden: Increasing chances of no interest rate reductions prior to election"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fnew-threat-to-biden-rising-odds-of-no-rate-cuts-before-election%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2221034&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The increasing odds of the Federal Reserve not cutting interest rates\u200d this year\u2064 have significant implications for the upcoming elections, potentially affecting President Joe Biden&#8217;s reelection prospects. Rising inflation rates have led to a\u2063 delay in expected rate cuts, affecting the\u2064 economy and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/youtuber-and-investor-turned-ca-gov-candidate-talks-future-schools-solving-homelessness-crisis-and-more\/\" title=\"YouTuber And Investor Turned CA Gov Candidate Talks \u2018Future Schools,\u2019 Solving Homelessness Crisis, And More\">consumer purchasing power<\/a>. The scenario could be\u200b used by Republicans to critique Biden&#8217;s handling of the\u200d economy.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>The rising odds that the Federal Reserve might not cut <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/interest-rates\" target=\"_blank\" rel=\"noopener\" title>interest rates<\/a> at all this year has major implications for the <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/2024-elections\" target=\"_blank\" rel=\"noopener\" title>coming elections<\/a>, especially in terms of imperiling President Joe Biden\u2019s quest for a second term.<\/p>\n<p>Just four months ago, investors were pricing in up to six interest rate cuts from the <a href=\"http:\/\/www.washingtonexaminer.com\/CLICK%20HERE%20TO%20READ%20MORE%20FROM%20THE%20WASHINGTON%20EXAMINER\">Fed<\/a> in 2024, with most expecting that the first cut would have already happened by now. But inflation has proved more stubborn than thought, and now the expected timing for those cuts is being dramatically pushed back, with some expecting just one small decrease and others seeing a possibility that the central bank will not lower its target rate at all this year.<\/p>\n<p><strong>Why might there be no rate cuts?<\/strong><\/p>\n<p>The higher interest rates are a result of years of too-high inflation. The rate of <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/inflation\">inflation<\/a> began to spike in early 2021 and peaked at over 9% in 2022. Since then, it has largely been falling as a result of the higher interest rates, although this year, it has proven stickier than anticipated \u2014 not only bad news for the economy and consumers but bad news politically for Biden.<\/p>\n<p>Inflation, as gauged by the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/manchin-every-senator-thinks-minimum-wage-should-be-increased\/\" title=\"Manchin: Every Senator Thinks Minimum Wage Should Be Increased\">consumer price index<\/a>, has wobbled between 3% and 3.7% since June 2023 but has not once fallen into the 2%-3% range.<\/p>\n<p>Higher interest rates are designed to squelch demand and thus cause prices to fall. So if inflation keeps coming in more than a percentage point higher than the Fed\u2019s preferred 2% rate or does not show progress on moving there, presumably the Fed would not cut interest rates.<\/p>\n<p>The markets are implying a rising likelihood of no cuts.<\/p>\n<p>Investors as of Friday were pricing in a probability of just about 1 in 10 that the Fed will not cut rates by the end of the year, according to the CME Group\u2019s FedWatch tool, which calculates the probability using futures contract prices for rates in the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/powell-set-to-testify-before-congress-heres-what-to-expect\/\" title=\"Powell set to testify before Congress \u2014 here's what to expect\">short-term market targeted<\/a> by the Fed. There are about 1 in 4 odds that rates won\u2019t be cut until the Fed\u2019s November meeting, which convenes the day after the election.<\/p>\n<p>Bank of America is now projecting that because of the stickier inflation, there will only be one cut this year, and it won\u2019t come until the very end of 2024.<\/p>\n<p>\u201cWe now expect the Fed to start cutting rates in December,\u201d researchers said in a note. \u201cWe no longer think policymakers will gain the confidence they need to start cutting in June.\u201d<\/p>\n<p><strong>What it means for the elections<\/strong><\/p>\n<p>The no-rate-hike scenario is one in which inflation is not yet under control, which Republicans would use to attack Biden. The hotter consumer price index report this week caused markets to sour and was a setback for the Biden campaign\u2019s messaging on inflation starting to decline.<\/p>\n<p>\u201cThis was easily the worst news he\u2019s had in a really long time,\u201d Alex Conant, a GOP strategist and a partner at Firehouse Strategies, said of Biden. \u201cAnd I think it\u2019s because the high inflation numbers mean it\u2019s far less likely that we\u2019ll see rate cuts this year, which is one of the ways people gauge the health of the economy.\u201d<\/p>\n<p>Conant told the <em>Washington Examiner<\/em> he fully expects Trump will promise voters lower interest rates if he is elected president, even though interest rates aren\u2019t really in the hands of the president.<\/p>\n<p>The higher interest rates, like inflation, <a href=\"https:\/\/www.washingtonexaminer.com\/policy\/finance-and-economy\/2956124\/the-economic-win-still-eluding-biden\/\" target=\"_blank\" rel=\"noopener\" title>are also hurting Biden<\/a> because they are <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/strong-jobs-strong-growth-not-enough-the-economic-win-still-eluding-biden\/\" title=\"Job growth is strong under Biden, but challenges remain for a robust economic recovery\">putting major consumer purchases<\/a>, such as houses, cars, and appliances, out of reach for many families.<\/p>\n<p>There has historically been a firewall between presidential administrations and the Fed, but Trump has sought to breach it before. While in office, Trump criticized Fed policy, blasting the central bank for raising interest rates too quickly. It was reported Trump had private discussions about firing Powell, although Powell <a href=\"https:\/\/www.cnbc.com\/2019\/03\/11\/fed-chair-powell-the-law-is-clear-trump-cant-fire-me.html\" title>said at the time<\/a> he didn\u2019t believe that Trump had the authority to fire him.<\/p>\n<p>In 2019, Trump notoriously wrote that his \u201conly question is, who is our biggest enemy,\u201d Powell or Chinese leader Xi Jinping.<\/p>\n<p>Peter Loge, director of the George Washington University School of Media and Public Affairs, said that the hotter reports are an unwelcome development for a sitting president, particularly in a reelection year.<\/p>\n<p>\u201cHigh inflation is never good news for an incumbent president, you know, you want prices coming down and jobs going up,\u201d he told the <em>Washington Examiner<\/em>. \u201cSo, it of course makes President Biden\u2019s campaign a little trickier than it otherwise might be.\u201d<\/p>\n<p>Loge pointed out that voters can\u2019t as tangibly feel the broader macroeconomic trends but do feel inflation first hand when going about their everyday lives.<\/p>\n<p>\u201cYou know, people don\u2019t experience the economy; we buy groceries and gas. And when groceries and gas cost more, we\u2019re not thinking about macroeconomic forces or shaking our fists at the Fed; we\u2019re thinking holy cow this costs more. And that\u2019s bad news for elected officials, for incumbents,\u201d he added.<\/p>\n<p>Loge said that voters\u2019 minds will be more focused on consumer prices than on the exact level of interest rates.<\/p>\n<p><a href=\"https:\/\/www.washingtonexaminer.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER<\/strong><\/a><\/p>\n<p>Also, while inflation has been running lower than its peak, the compounded effects of years of inflation under Biden might also stand out to voters.<\/p>\n<p>For instance, since the month Biden entered office, electricity prices have soared by more than 29%, the price of piped gas has risen nearly 30%, Meats, poultry, fish, and eggs are up 21.4%, while fruits and vegetables now cost 14.4% more than January 2021.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The increasing likelihood of the Federal Reserve refraining from interest rate cuts this year greatly impacts the upcoming elections, potentially jeopardizing President Joe Biden&#8217;s reelection bid. Just four months earlier, investors anticipated as many as six rate cuts from the Fed in 2024<\/p>\n","protected":false},"author":2683,"featured_media":2221035,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/03\/AP24031746433908-1024x683.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2221034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/03\/AP24031746433908-1024x683.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2221034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2683"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2221034"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2221034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2221035"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2221034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2221034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2221034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}