Morgan Stanley put it this way on Sunday: “We live in the most chaotic, hard-to-predict macroeconomic times in decades.”
“Market stress signals are high,” UBS warned its clients Sunday.
You can say that again.
But polls show inflation and Covid fatigue cancel out any good news.
Americans say they feel lousy about the economy, even though they are spending their money like crazy. Consumers literally can’t find all the stuff they want to spend money on. (There’s that broken supply chain again.)
What can Biden do?
All of this makes it a tall order for the White House to message that fighting inflation is issue number one. The fact is, there is no silver bullet.
Instead, economists say there are a variety of levers the White House can pull, many with drawbacks — and, frankly, you need Congress too.
Some recommend ending the Jones Act to blunt energy prices. That would allow non-US vessels to carry oil shipments. Others want a national gas tax holiday.
Another option: more immigrant worker visas, to address labor shortages. That would take Congress, of course.
You’d need Congress, too, to expand child tax credits for low-income families grappling with high costs for gas and groceries.
Moody’s Chief Economist Mark Zandi notes that Congress could also get serious on addressing the low supply of rental homes and rent growth, which has been a big driver of inflation.
“Bottom line, inflation will not recede in earnest until we are on the other side of the pandemic, and global supply chains iron themselves out and the economic fallout from the Russian invasion of Ukraine fades away,” Zandi said.
— CNN’s Kate Trafecante contributed to this story.
Read More: President Biden doesn’t have a silver bullet for inflation