Recession — A Self-Fulfilling Prophecy? Plus, Donald Trump’s Very Big Week
Author: Greg Valliere
May 16, 2022
IT APPARENTLY DOESN’T MATTER that consumers — and states — are flush with cash, or that the labor market is still red-hot. The public’s confidence is plummeting, as fears of recession spread from Goldman Sachs to Main Street.
THIS IS STARTING TO LOOK like a self-fulling prophecy, and Joe Biden can’t do much about it. He may agree to modest student loan relief and a gasoline tax break, but he’s flailing, headed for a major election defeat in November.
BIDEN HAS THREE POTENTIAL PLUSSES that could lessen the magnitude of his defeat this fall. First, Ukraine has repulsed the inept Russian invasion; second, the Federal Reserve may slow its tightening after two more 50-basis point moves this summer; and third, the Republicans are in disarray, as we describe below.
* * * * *
ALL EYES ON PENNSYLVANIA: Donald Trump’s dominance in the Republican Party faces a major test tomorrow — the turbulent Pennsylvania primary, where his endorsement of Dr. Mehmet Oz could fail. What’s surprising is that many mainstream Republicans in this town are rooting for Trump to stumble.
THE FURIOUS BATTLE BETWEEN TRUMP and Senate Minority Leader Mitch McConnell has erupted again, as the former president urges Congress to reject new aid for Ukraine. McConnell was in Kyiv this past weekend, urging passage of the $40 billion bill. Incredibly, 57 House Republicans voted against it last week, opening a wide fissure within the party.
RIGHT WING ACTIVISTS want to kill the measure, citing its cost and pressing needs at home, and some will oppose virtually anything that Biden wants. The Ukrainian bill eventually will pass, but McConnell and the mainstream have a fire to put out within the isolationist GOP grass roots.
THE TOXIC DEBATE OVER White Replacement Theory has also divided the party, with hard-line conservatives embracing Tucker Carlson’s charges that illegal immigrants and people of color want to dominate U.S. policy. In light of the Buffalo massacre this weekend, White Replacement Theory has become a major controversy.
THIS IS THE LAST THING McCONNELL WANTS: As we wrote last week, he wants to run out the clock, staying away from controversy — and that includes staying away from Trump. Many Republicans want investment banker David McCormick to win in Pennsylvania — which would be a repudiation of Trump. McCormick may have the best chance of winning in November; if fast-closing right wing activist Kathy Barnette wins tomorrow, she probably would be the underdog in the general election.
TRUMP NEEDS A VICTORY TOMORROW NIGHT, because he almost certainly faces an embarrassment in Georgia next week, when his arch-enemy Brian Kemp is expected to win comfortably in the GOP’s gubernatorial primary.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.