Democrats ride inflation wave back into power in Congress
James Carville's mantra rings in my ears every election cycle: "It's the economy , stupid". The famed political strategist coined the phrase in 1992 but it's still relevant now, with the Democrats on track to retake both chambers of Congress in the midterm elections, gaining powerful oversight roles over Donald Trump 's presidency. The result will probably have a profound impact on the data…
The Democrats are making a strong comeback in the upcoming midterm elections, aiming to reclaim control of both chambers of Congress. This potential shift in power could have significant implications for various sectors, including the data centre industry.
According to a recent NBC News exit poll, a majority of voters feel the midterms are a response to President Trump's performance, with the economy being a primary concern. The poll showed nearly half of voters saw this election as a way to express dissatisfaction with the President, with the economy cited as a key frustration.
Trump's campaign promises during the 2024 election included reducing energy costs, controlling inflation, and making America more affordable. However, recent data suggests that the economy is doing well, with US manufacturing activity increasing, layoffs at their lowest in 18 months, job openings surging, and GDP accelerating at a 3.4% rate in the third quarter. Consumer spending remains strong, and the unemployment rate hovers around a historically low 4%.
Yet, Trump's campaign has been hampered by inflation, which has risen to 9.1% in 2022. This surge in inflation can be attributed to a series of stimulus checks and increased energy prices, particularly following the war in Iran. The Federal Reserve has raised interest rates in response, and yields on 10 and 30-year Treasuries have climbed to their highest levels since before the 2008 global financial crisis.
A majority of voters, roughly two-thirds, believe the President has made the economy worse. Additionally, 75% of voters expressed dissatisfaction or anger about the current state of the country. Despite Trump's assertions that inflation is under control, voters are experiencing sticker shock at the gas pump and grocery store. Traders have taken notice, with futures on major stock indices trading in the red and investors moving into safer bonds.
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