It was just a few days ago, after one of the stock markets reached an unprecedented high, that President Joe Biden seized on that bit of good news and bragged on social media about the supposed success of his economic policies.
Yet, just a few days later, those historic gains and then some had vanished as all of the major stock markets took a precipitous tumble in the immediate wake of a less-than-stellar economics and inflation report for the month of January, Yahoo! Finance reported.
The stunning turnabout seemed to at least partially vindicate former President Donald Trump's prediction a month earlier that Biden's inflation-plagued economy was "fragile" and due for an imminent "crash" -- preferably for Trump while Biden was still in office and would receive the blame for his mismanagement of the nation's economy.
On Saturday, President Biden's social media team shared a Friday report from NBC News about how the S&P 500, after five straight weeks of gains, had closed above the 5,000 mark for the first time in its history.
The X post from Biden stated, "Good news for folks as we start the weekend. The stock market going strong is a sign of confidence in America’s economy."
However, Yahoo! Finance reported Tuesday that all three of the major stock market indices had fallen by more than 1% each, with the tech-centric NASDAQ losing 1.8%, the Dow Jones Industrial Average losing 1.4%, or around 500 points, and the S&P 500 suffering a similar decline and falling back below the historic 5,000 mark.
Those losses in the stock market, which in contrast to Biden's X post would presumably signal weakened confidence in America's economy, came on the heels of the January economic report that showed how inflation -- which Biden's administration has often sought to dismiss as a problem or erroneously claimed has been tamed -- had ticked back up again more than analysts had predicted.
According to The Hill, the Consumer Price Index released on Tuesday revealed that price inflation had risen 0.3% from December to January, more than the 0.2% analysts had predicted, and was up 3.1% from the same time last year, more than the 2.9% increase that had been predicted.
That prompted legitimate fears that the Federal Reserve would likely delay moving forward with its plans to begin cutting interest rates that have been hiked substantially over the past two years in its thus far failed effort to bring inflation down to its normal average of 2% year-over-year.
"Today’s CPI report caught a lot of people off guard -- many investors were expecting the Fed to begin cutting rates and were spending a lot of time arguing that the Fed was taking too long to get started," investment adviser Chris Zaccarelli told the outlet. "This is only one month’s report and if next month’s report shows a decline in inflation then this will have been just a bump in the road, but if we see a new pattern of inflation stalling out at current levels (or worse increasing from here) then the stock market has further to fall."
It was just about one month earlier when CNN reported that former President Trump, in a controversial interview, predicted that President Biden's "fragile" economy, which he asserted was "running off the fumes" of his prior prosperous economic policies, was likely due to "crash" in the near future, and expressed his hope that the crash would occur before the election in November.
"When there’s a crash, I hope it’s going to be during this next 12 months because I don’t want to be Herbert Hoover. The one president -- I just don’t want to be Herbert Hoover," Trump said, referencing the former president in 1929 who presided over the massive stock market crash that precipitated the Great Depression that lasted for roughly a decade.
As for what this week's market tumble means in terms of likely stalling the anticipated rate cuts by the Fed, The Hill observed that Trump -- among many others -- has accused Federal Reserve Chair Jerome Powell of being "political" and partisan with planned interest rate cuts that will temporarily juice the economy in an election year to the obvious benefit of the incumbent President Biden.
That theory is due, at least in part, to the fact that virtually all of the polls have consistently shown that voters overwhelmingly prefer Trump to Biden in terms of their respective economic policies, given the prosperity and wealth gains of the Trump years in contrast with the high inflation, high interest rates, and diminished wealth and belt-tightening that has occurred under Biden's policies.
