Biden's economic policies have sparked widespread attention and discussion. In a public speech, he elaborated on his economic policies and compared them with those of his predecessor. Biden believes that the current problems facing the U.S. economy are multifaceted, so aggressive policies are needed to stabilize and promote economic growth. His economic policies are based on three core principles: smarter public investment, strengthening the middle class, and promoting healthy competition in the market.
Biden advocates increasing public investment through aggressive fiscal deficits to create more jobs and economic growth. He proposed a series of economic stimulus plans and policies, such as the American Recovery Act, the American Families Plan, the Infrastructure Plan, and the Manufacturing Repatriation Plan. According to statistics, since Biden took office, the total amount of economic stimulus policies in the United States has exceeded $8 trillion. These policies not only kept the economy growing positively during the dollar's interest rate hike cycle, but also brought unemployment down to a low level.
However, some may argue that this economic boom is a temporary illusion created by large fiscal deficits. In fact, the deficit problem in the United States has become very serious. Countries around the world are selling off U.S. bonds, resulting in high U.S. bond interest rates and even inverted. As a result, long-term U.S. bonds are almost uninterested, and new U.S. bond issuances are difficult to sell. These two issues create enormous difficulties for the US dollar to raise interest rates.
As the year 2024 approaches, Biden is faced with an important choice about how to deal with the US dollar's interest rate hike economically. Considering the peculiarities of the year, the most important factor for Biden should be to maintain the stability and growth of the domestic economy, and not compete with countries such as China or Russia.
Biden's economic policy is essentially a seesaw model, with a US dollar rate hike at one end and a fiscal deficit at the other. If the US dollar rate hike is aggravated, the fiscal deficit will inevitably increase. Conversely, if the fiscal deficit is unsustainable and the dollar continues to raise interest rates, there will be an imbalance in the seesaw. Therefore, whether he chooses to raise interest rates, stop raising interest rates, or cut them will depend on the sustainability of the fiscal deficit.
The current situation is that the sustainability of the fiscal deficit is facing a huge challenge. Even from the point of view of winning, Biden wants to maintain a high level of fiscal deficit. In September, Biden** submitted a budget proposal to Congress for the year 2024, with a budget deficit of up to 1$846 trillion, with a deficit ratio of 68%。This level is still extremely high. However, the dispute between the two parties has been extended until January next year due to opposition to the budget by the Republican-controlled House of Representatives.
To sum up, Biden's model of raising the fiscal deficit to stimulate the economy has been difficult to continue. As a result, many institutions have generally cut interest rates on the US dollar next year, with Deutsche Bank even cutting interest rates by as much as 175 basis points. However, if Biden's 2024 budget proposal passes, the dollar is likely to remain at a higher rate and not cut anytime soon.
After the new ** came to power, the economic policy of the United States has aroused great concern and controversy. Biden** faces a number of challenges in dealing with the US dollar's interest rate hikes, including the sustainability of the fiscal deficit and the stability of the domestic economy. Biden's aggressive economic policies have indeed brought some economic prosperity in the short term, but they have also raised some problems, such as the continued increase in fiscal deficits and the difficulties of the US bond market.
In mid-2024, Biden will face a series of choices. In order to preserve the domestic economy, he may have to adjust his economic policy, although this may have some impact on the US dollar interest rate hike. However, no matter what you choose, the key is still how to solve the fiscal deficit problem in order to maintain economic stability and sustainable development. In addition, bipartisan disputes over the budget will also affect the formulation and implementation of economic policies.
Overall, raising interest rates in the US dollar is a complex issue that needs to be considered by a number of factors. Regardless of the final decision, we need to pay close attention to relevant economic indicators and policy changes to better understand how the U.S. economy is headed.