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The biggest threat to Biden’s hot economy could be his own policies.

  • As Americans resume pre-Covid activity and the White House seeks even more stimulus, President Joe Biden’s policy agenda may be his biggest economic threat.
  • “The headwind could be too much of a good thing,” economist Allen Sinai says of continued stimulus efforts like Biden’s infrastructure plan and the rising risk of inflation.
  • Biden has a lot to celebrate about his economy: Job growth and wages are on the rise, economic activity is returning and the S&P 500 is breaking records.
  • The Federal Reserve could move to hike interest rates if inflation spikes in the second half of 2021 or beyond.
  • Halfway through 2021, and about six months into the Biden administration, the U.S. economy has by many metrics made a full recovery from the Covid-19 pandemic.

    One year ago, nationwide business closures sent the unemployment rate climbing to 13.3%. It’s now at 5.8%. Average hourly wages are now higher than they were just before the pandemic.

    The stock market is at record highs, and U.S. consumers are now feeling more confident than at any point in the last 16 months. GDP, which swooned 31.4% in the second quarter of 2020, is expected to top 8% in the second quarter of 2021 and herald a new era of business expansion.

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