With midterm elections incoming, Democrats are frantically trying to build their case for voters in what has been a very rough year in the United States. The biggest problem to US citizens is the economy; more specifically, inflation, which is sitting at multi-decade highs. Dems are pointing to other parts of the country as target areas, but the inflation crisis is something that needs to be solved, not just for political gain, but for the future and well-being of the country.
The government has been looking for solutions to pair with obvious rate increases, and Treasury Secretary Janet Yellen has proposed something that kicks our brain back to the 2019 era of the stock market. Ever since the trade war between China and the US during the Trump administration, tariffs have been placed on specific Chinese products imported into the US. According to Yellen, the administration is looking into possibly reducing tariffs on some products, which would be a major reversal from Trump-era policies. Yellen believes it could bring down prices, which would help with the inflation problem, but there is still some division between the President’s advisers as some want to continue to keep the pressure on China to keep a healthy trade relationship. Yellen said that she doesn’t believe that this will solely solve the problem as goods only account for a third of the problem, but they are looking at this to be a step forward. The unfortunate part about this proposal is that it goes both ways. It might help to soothe the inflation crisis, but it’s also letting China off the hook in a tight economic race, which could have long-term implications. However, the US needs to get past inflation to continue growing as an economy, leaving a tough decision for the government to make.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.