Yellen backs ‘Bidenomics’ amid dim economic polls

U.S. Treasury Secretary Janet Yellen outlined President Biden’s economic achievements as many Americans are unhappy with his handling of the economy ahead of a pivotal presidential election.

“Americans are applying to start businesses at a record pace, consumers are buying more, and inflation has come down substantially,” Yellen wrote in an op-ed for The Wall Street Journal.

The latest Labor Department data shows inflation, which topped 9 percent year over year at its peak last June, fell to 3.1 percent in November in part due to an aggressive rate hike campaign by the Federal Reserve. 

While the central bank held interest rates steady at its final meeting of the year, Fed Chair Jerome Powell suggested the central bank was close to the end of its rate hike cycle, sending markets soaring and mortgage rates dropping.

Unemployment has also remained below 4 percent for 22 months, the longest stretch in more than 50 years, Yellen noted. Economic growth has been surprisingly strong, though the Fed forecasts that will settle down next year as the economy comes in for the illusive “soft landing.”

In other words, it looks like the central bank has managed to bring down inflation without triggering a recession.

That’s a massive about-face from a year ago, when some forecasted a 100 percent chance of a recession in 2023.

And they did it as the Biden administration navigated “supply-chain bottlenecks,” the war in Ukraine and the unsettling collapse of Silicon Valley Bank this spring, Yellen pointed out.

But polls show the economy is not a winning message for Biden among voters across the political spectrum.

A recent CNN poll found that just 33 percent of Americans approve of Biden’s handling of the economy, and only 29 percent thought economic conditions were “very good” or “somewhat good.”

More Americans think the economy and inflation are the most important challenges the country is facing, outstripping other hot-button issues including immigration, abortion and foreign policy, according to a New York Times/Siena poll published last week.

Interest rates, which are at their highest level in more than two decades, have weighed heavily on Americans looking to borrow money. Total household debt hit a record high of $17.3 trillion during the third quarter of 2023, according to the New York Fed, and delinquencies on credit cards, mortgages and auto loans have been ticking up.

And while inflation has steadily fallen, it’s still above the Fed’s 2 percent target.

“We recognize that middle-class Americans continue to face costly food and rent, which matters enormously to their budgets and daily lives. President Biden and I are focused on lowering prices where we can,” Yellen wrote.