Joe Biden thought the political winds were at his back.
Democrats turned in a better-than-expected performance in the midterm elections and Biden began making his 2024 plans.
But one sinister prediction is about to make Joe Biden’s worst nightmare come true.
If there is one thing that can sink a presidency and end a re-election campaign it is a recession.
When the Gross Domestic Product (GDP) contracted in the first two quarters of 2022 the American economy met the technical definition of a recession.
The economy grew at 2.9 percent in the third quarter providing Biden a lifeline to fight back against that reality.
However, the reality paints a much grimmer picture.
PIMCO economist Tiffany Wilding explained why the GDP report actually forecast a recession.
“If you dig into the details of the third quarter GDP number, what you find is that when you exclude those more volatile categories, growth was actually pretty subpar,” Wilding stated. “Core growth has decelerated quite a bit and that’s even before you really start to feel the effects of Fed policy and Fed tightening.”
Wilding added that her firm did not move off their projection of a recession hitting the economy next year as the Federal Reserve hiking interest rates to try and tame Joe Biden’s runaway inflation took its toll.
“We do think the economy slips into a recession next year under the weight of the financial conditions tightening that we’ve seen so far. But nevertheless, of course, it’s always good news to have some slight upper revisions to the third quarter GDP growth,” Wilding added.
PIMCO is not the only major institution projecting a recession in 2023.
A probability model put together by Bloomberg economists found a 100 percent chance of the economy plunging into a recession in the next 12 months.
Bloomberg reports:
A US recession is effectively certain in the next 12 months in new Bloomberg Economics model projections, a blow to President Joe Biden’s economic messaging ahead of the November midterms.
The latest recession probability models by Bloomberg economists Anna Wong and Eliza Winger forecast a higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100%, up from 65% for the comparable period in the previous update.
The later the recession hits the worse it is for Joe Biden.
A recession that strikes the economy at the midpoint of 2023 will drag into 2024 and define the election as a referendum on Joe Biden’s failed economic leadership.
Presidents that run for re-election in the midst of a recession lose.
If America falls into a recession next year, there is a good possibility that Joe Biden bows out of the 2024 race.
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