The Fed will do everything it can to avoid a recession prior to November 2024. Inflation is preferrable to labor market issues, according to Goldman Sachs. That means you can count on the Deep State with help from the Fed to do all it can to avoid labor issues before the election.
Incumbent presidents and their parties suffer when facing an election with a recession. Goldman Sachs highlighted this trend in a recent analysis.
“Since 1951, when the constitutional amendment was ratified to limit presidents to two terms, the incumbent has lost when the election took place soon after a recession (in 1976, 1980, 1992, and 2020). The party in the White House also lost after a recession in two instances when the incumbent candidate was not on the ballot (1960 and 2008),” Goldman Sachs posted on its website.
To get Donald Trump out of the White House, it required a pandemic and the economic disruption of lockdowns (not to mention radical voting changes and as Vivek Ramaswamy said the conspiracy of Big Tech). What will it take to keep Joe Biden, or given Biden’s obvious mental and physical decline a Democrat in the White House? Avoiding a recession at any cost.
Again, even inflation is less important than labor market conditions. According to Goldman Sachs, “The strongest statistical relationship with election outcomes is often with variables measured in the second quarter of an election year. Inflation appears to be less predictive of election results than indicators related to growth or the state of the labor market. Headline inflation, in a sample going back to 1952, is weakly statistically significant as a predictor of election results, Phillips and Krupa write. Elections during periods of high inflation show a stronger relationship, but even in these elections, the signals provided by growth and labor variables are stronger.”
So, if the choice is between Joe Biden having a recession or Bidenomics causing another round of surging inflation, you can bet the Deep State will opt for inflation.