The Federal Reserve increased targets for the federal funds rate by 0.75% on Wednesday afternoon, sending the Dow Jones Industrial Average, which tracks 30 of the most prominent companies on American exchanges, tumbling more than 500 points. After stagnating on Thursday, the index fell another 500 points by early Friday afternoon to 29,400. On January 20, 2021, the day of Biden’s inauguration, the Dow had closed slightly above 30,900.
“They said the stock market will boom if I am elected,” Trump said during a 2020 presidential debate. “If he’s elected, the stock market will crash.”
Nasdaq Performance 612 days in office
President Trump: +44.17
President Biden: -19.24%pic.twitter.com/DOitQP1a7h
— InteractivePolls (@IAPolls2022) September 23, 2022
According to conservative polling group InteractivePolls, which posted the clip from the debate to social media, the tech-heavy NASDAQ had risen 44% once Trump was 612 days into his first term. At the same point in Biden’s tenure, however, the index has fallen more than 19%.
Indeed, the United States economy has languished over the past two years under multiple disruptions — including labor shortages, supply chain bottlenecks, and the Russian invasion of Ukraine — all of which have contributed to worsening inflationary pressures.
Price levels between August 2021 and August 2022 rose 8.3%, according to data from the Bureau of Labor Statistics, marking a slight moderation from an 8.5% year-over-year increase in July and a 9.1% year-over-year increase in June. Despite the moderation in year-over-year inflation, month-to-month prices for food, shelter, and medical services ticked upward, while core inflation — a metric that excludes food and energy, which tend to be more volatile — continued to rise.
Officials from the Biden administration have nevertheless claimed that the economy is strong. When Fox News correspondent Peter Doocy pressed White House Press Secretary Karine Jean-Pierre on a poll showing that 83% of Americans believe the economy is “poor or not so good” earlier this year, she doubled down on the notion that the economy has improved since Biden assumed office.
“What I’m trying to say to you is that the economy is in a better place than it has been historically,” Jean-Pierre said. “And so, we feel, here at this administration and other experts as well … we feel that we are in a good position to take on inflation. We are in a good position to really start really working on lowering prices.”
A key factor behind inflationary pressures has been the cost of energy. Biden has pushed renewable power while leasing less federal land for oil and natural gas drilling than any of his predecessors since World War II. At the beginning of his tenure, Biden also nixed expansions to the Keystone XL pipeline project.
The Federal Reserve has repeatedly increased interest rate targets in response to rising price levels. Officials also announced interest rate hikes of 0.75% in June and July — moves meant to discourage inflation by increasing the cost of borrowing money for businesses and consumers. To stimulate the economy after the lockdown-induced recession, the Federal Reserve had formerly pegged a near-zero target interest rate and purchased government bonds from the market.