Tone Deaf in Washington — and Moscow
Author: Greg Valliere
September 14, 2022
BIDEN’S CREDIBILITIY PROBLEM: He seems to believe that inflation will soon be falling, but more spending in the Inflation Reduction Act doesn’t seem like a successful prescription. Yesterday’s CPI data stunned Wall Street and virtually guarantees aggressive Fed tightening for months to come.
YET THE MOOD WAS CELEBRATORY as thousands on the White House lawn were serenaded by James Taylor, and Biden declared victory. But his administration, and the Fed, have consistently gotten the inflation narrative wrong; it isn’t just about gasoline prices — it’s also about food prices and core inflation, still stubbornly high.
JUST AS REPUBLICANS WERE PREPARING TO POUNCE on Biden’s tone deaf celebration, Sen. Graham stunned his colleagues by stepping on their inflation message. Graham announced his support for a national ban on abortion after 15 weeks of pregnancy, reversing his previous position that the states should decide.
GOP SENATORS WERE ANGRY at the publicity-hungry Graham; many of their candidates in this fall’s elections have lost altitude since Roe v. Wade was overturned, and the party doesn’t want to address the issue. They’re bucking public opinion on abortion, and Graham just shined a spotlight on the party’s divisions.
BIDEN’S AIDES WERE SHOCKED at the political lifeline they’d just been handed. Some were quoted in this morning’s Politico as being grateful to Graham for diverting attention away from the CPI report and the subsequent market crash.
THEN DEMOCRATS GOT ANOTHER GIFT, an apparent Senate primary victory in New Hampshire by a pro-Trump Republican who claims that Biden’s victory in 2020 was rigged. The incumbent Democrat, Maggie Hassan, was considered the most vulnerable Democrat in the Senate this fall, and now she may hang on against the election denying-Trump supporter.
THE BOTTOM LINE IS GRIM for both parties: The Democrats cannot successfully run by proclaiming that inflation is easing, and the Republicans cannot successfully run on banning abortion. Voters think Washington doesn’t appreciate the magnitude of inflation, while elections in Kansas and elsewhere show that women (and many men) are angry about strict abortion curbs.
OUR BOTTOM LINE after the New Hampshire vote is that Democrats still have a slightly better than 50-50 chance of keeping the Senate, while Republicans are still likely to regain control of the House — but their margin may be razor-thin.
* * * * *
SPEAKING OF TONE-DEAF . . . the biggest story of the year continues in Ukraine, as Russian troop morale collapses; they’re fleeing, leaving their weapons behind. Public criticism of Vladimir Putin within Russia is equally astonishing; he’s more than tone-deaf — he’s delusional — and it might be just a matter of time before he is forcibly ousted.
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.
©2022 AGF Management Limited. All rights reserved.