Biden's Interest Rate Disaster

Americans must grapple with an unprecedented economic mess.

The latest economic news all points to a worst possible combination under Joe Biden: persistent, soaring inflation with an intensifying recession. In contravention of any normal business cycle, Biden and Pelosi and Schumer usher in the toxic stagflation combination unseen in America since the 1970’s: surging prices with crashing growth.

Last week brought the dismal news that inflation remains deeply embedded within the American economy. The harsh reality, as relayed by the numbers, points to a lasting shift in overall pricing that is anything but “transitory.” The broad

CPI came in red hot, well above expectations at 8.3%, one of the highest numbers in 40 years. But the details revealed even worse hurdles for struggling Americans.

For example, the basket of “have to” items that everyone must purchase – Gasoline, Groceries, and Utilities – increased at an astounding 24% annualized pace. Here is the breakdown of the “Cortes Staples Basket”:

Those items are primarily commodity-based, and the price increases largely emanate from Biden’s ludicrous war on domestic American energy production. But even away from commodity items, inflation for services soars, as well. In many ways, this services inflation presents a more problematic kind of price pressure, because once such costs rise, they rarely, if ever, go back down. Hence, have a look at this basket of “stickier” inflation.

This broad inflation across goods and services culminates in a fierce re-pricing of interest rates in our economy. In fact, the benchmark bond market for the entire economy (and the whole world), the Ten Year Treasury Note, has been crushed in prices in recent months under Biden. Interest Rates, or yields, move opposite to price. So, 10 Year Treasury Interest Rates hit a brand new Biden high at 3.80% this week, the highest such levels since 2011.

Here's the chart of woe: