After Fed Rate Cuts, Will the Economic Vibe Improve by the Election?

Polling shows voters feel persistently sour about the economy, a confounding dynamic for Democrats.

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President Biden and Vice President Kamala Harris have led the country out of a recession and through a period of strong economic growth, but they have struggled to turn those achievements into positive feelings among voters.

The war on inflation is all but won.

That was the message from the Federal Reserve on Wednesday when it cut interest rates by half a percentage point, making a surprisingly large move that hands the Biden administration a big win on an issue that has caused Democrats — not to mention millions of Americans — big headaches over the last few years.

It’s the latest in a run of good economic news for President Biden and Vice President Kamala Harris, even though the low unemployment rate has begun to tick up. Writing this morning, my colleague Jim Tankersley summed up the sunny data this way:

The price of gasoline has fallen below $3 a gallon in much of the South and Midwest and is nearing a three-year low nationally. Spiking grocery prices have slowed to a crawl. Mortgage rates are down more than a percentage point from their recent peak. The Census Bureau reported last week that the typical household income rose faster than prices last year for the first time since the pandemic. The overall inflation rate has returned to near historically normal levels.

The real question for November, though, is whether all that good news will be enough to improve the economic vibe.

Biden and Harris have led the country through a period of economic growth and job gains while inflation came down, but they have struggled to turn those achievements into broadly happy feelings among voters. The gap between the good news about the economy and the way voters are perceiving it has turned into one of the defining — and for Democrats, one of the most confounding — dynamics of this election.

The polls

Polling shows voters are feeling persistently sour about the economy. The most recent national poll by The New York Times and Siena College found that just 2 percent of the likely electorate considered the economy to be “excellent,” while 21 percent called it “good.” Twenty-eight percent of voters called it “only fair,” while nearly half — 49 percent — rated it “poor.”

One of those voters was Kelly Hunt, 56, a former nurse from Elyria, Ohio, who now relies on a fixed disability income to feed her five grandchildren. Hunt, who told me she was a registered Democrat who backed Hillary Clinton in 2016 and former President Donald Trump in 2020, said none of the economic gains in the news felt as if they had filtered down to her. She goes to multiple stores to buy chicken and beef, wherever they are on sale, and takes her grandchildren out to McDonald’s only if she has coupons.

“They can keep saying anything they want to, but when I go to the store and I can’t buy everything I used to and I can’t fill up my tanks, I know they’re not telling the truth,” she said.

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