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Saturday, September 18, 2021

American Voters See President Trump Has Taken Charge of the Economy, Having Effectively Sidelined the Fed

Attention: Now what really matters is just what the President does and is going to do.

President Trump blames the Fed for a slowing US economy, some blame it on him.

A survey conducted with YouGov showed 28% of American adults believe the President in general is most responsible for the economy.

That surpasses the 20% of respondents who say Congress is most responsible and the 17% who assign responsibility to the Fed. The margin of error is plus or minus 3 percentage points.

President Trump has repeatedly attacked the Fed and its Chairman Jerome Powell, accusing the Fed of stifling economic growth by keeping interest rates too high. The poll suggests about 2X as many Americans see the President as most responsible for the nation’s economic well-being.

Over the past 2 years, Trump has tied himself closely to the economy.

He has shifted the paradigm to: ‘The economy’s good because of me and the economy’s bad because of somebody else”, and it is working.

The US economic growth cooled in Q-2 to a 2% annualized pace, and some analysts expect slower gains in 2-H, putting President Trump’s 3% goal out of reach. And some economists see higher chances of an imminent recession than they did a year ago. Many others disagree.

The survey asked 1,262 adults, “In your opinion, who is most responsible for the economy?” Options included the President, Congress, the Fed, “none of these,” and “don’t know.” The survey was conducted between 6-9 September.

Who is truly responsible for the economy can be a matter of debate. The President and lawmakers can set parameters for growth through taxes, fiscal policy and regulation. At the same time, the Fed has a powerful tool in short-term interest rates to manage swings in the economy.

Ultimately the holder of the Oval Office is the 1 who gets the credit or the blame for the US economy.

Through Tweets, speeches and press releases, President Trump has emphasized his role in stock-market gains, low unemployment and economic growth.

And at the same time the President distances himself from any negative data by blaming the Fed. That is for good reason: In the last century, the only elected Presidents who lost re-election did so after overseeing a recession.

Because of how strong President Trump has been about what the Fed should and should not do, there may be “a feeling that relative to past Presidents, he’s doing a lot more trying to manage the economy,” said 1 investment strategist that I read.

By announcing tariffs and policy updates through Twitter, President Trump associates himself with Americans directly and unfiltered his intentions to protect American businesses and the economy from what he calls one-sided trade deals.

Expansions typically end because of a policy mistake by Congress, the President or the Fed, and now, if you are looking around for reasons a lot of people would point to is trade policy, but a bit of pain now will lead to plenty down the line.

Dividing data among different groups, Republicans (35%) were more likely to assign responsibility of the economy to the President than Democrats (30%).

Oddly enough the most educated that took the survey on who is responsible for the economy, the President or the Fed answered, don’t know and none of these.

Again, what really matters is just what the President does and is going to do.

Making and Keeping America Great!

Have a terrific weekend.

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