Nearly three out of four Americans say the economy isn’t doing well on President Joe Biden’s watch, according to a recent Economist/YouGov poll, while a separate survey showed that a record share of Americans believe the country’s best years are behind us.
Asked whether they approve of Biden’s handling of jobs and the economy, a greater share (48 percent vs. 42 percent) said they disapprove.
More gloom was expressed by people responding to a recent NBC poll, which showed that 74 percent of Americans believe the country is on the wrong track.
‘Severe Recession’ or ‘Mild Dowturn’?
The pessimistic readings come amid growing fears of a sharp economic downturn as persistently high inflation pressures the Federal Reserve to hold the course on aggressive monetary policy tightening.Rate Hikes to Continue
Investors will be keeping a close eye on this week’s annual Fed meeting in Jackson Hole, Wyoming, after minutes last week from the central bank’s recent policy meeting affirmed plans to keep hiking rates in a bid to quell inflationary pressures despite signs of economic weakness.“The minutes to the Federal Reserve’s July FOMC [Federal Open Market Committee] meeting point to ongoing rate hikes to ensure that inflation and inflation expectations don’t become embedded,” analysts at ING said in a note.
“However, ’many' participants fear they could end up going too far into restrictive territory, which suggests a clear chance the Fed ends up reversing course next year,” the analysts added.
Besides the Jackson Hole meeting, where the Fed will try to shape market expectations, investors will also be looking at the upcoming inflation and jobs data, which will be released ahead of the central bank’s September rate-setting meeting.
“We are still saying 50 [basis points] September, 50 [basis points] November, and 25 [basis points] December, but if we got another 350,000 jobs print for August and CPI failed to show any moderation from the 8.5 percent headline and 5.9 percent core, then we would likely switch to a 75 [basis point] call for September,” ING analysts said.
A 75 basis-point hike would put the target fed funds rate at between 3.0 percent and 3.25 percent.