This week in Bidenomics

Yahoo Finance's Rick Newman joined Yahoo Finance Live to break down his thoughts on the FOMC hinting at 2 rate hikes in 2023 and what this means for Americans.

Video transcript

- So this week in Bidenomics, what you didn't hear during the commercial break was Rick Newman channeling Tina Turner. And her song "I Don't Want to Fight" might be appropriate because you're pointing out two dastardly rate hikes that are still at least a year off, two years off [INAUDIBLE]

RICK NEWMAN: Yeah, and I watched the Tina Turner documentary recently, so she's been on my mind. But yeah, look, the Fed blinked on inflation a little bit this week. We saw the change in the forecast for interest rates, and then what the St. Louis Fed president, [? Bullard, ?] said we might even get an interest rate hike in 2022. The White House keeps saying, hey, inflation is transitory, but you're hearing more and more voices saying, eh, we're not so sure about that. And if this goes on for another couple months, I think this could become a political problem for President Biden.

We've already got some things that are really important to consumers going up in prices. Used cars is one of them, but the big thing, I think, right now is gasoline. Gas prices are up more than 50% over the last 12 months. And Biden might reach a point where he's going to start to seem a little tone-deaf if he keeps saying, don't worry, it's transitory, it's not going to last very long, if it continues to persist. So it seems like the White House needs to start paying closer attention to this, and maybe changing its messaging a little bit.

- And Rick, talking about changing his messaging, [INAUDIBLE] so important for Biden, especially heading into the midterms, if he doesn't change his messaging and really tries to stick with this transitory theory, I guess how big of a headwind do you see this potentially being?

RICK NEWMAN: We're a long way from the midterms, even though everybody in Washington is already campaigning. You know, if we get six months of inflation, let's see-- let's say-- I mean, it's almost 5% right now-- let's say we have something like this for the next six months, but then it moderates and prices come back down by late this year or, you know, going into 2022. I think Biden is probably doing OK. I mean, he's got the benefit of the vaccines are working, we're getting back to normal, we do have strong economic growth, we're probably going to have strong employment growth by the end of this year. So that would be OK. But you know, the things that trip up presidents are often the things nobody sees coming. And I think they should just know that this is creeping up on them.

- Very quickly, the Supreme Court decisions this week, how does the Biden administration either gain or lose from those?

RICK NEWMAN: I think it gains because this idea of killing Obamacare has just become-- it's not just a legal failure for Republicans, it's a political loser, too. I mean, support for the ACA has come up from-- it was very low at the beginning. It's come up from like 35%. It's now around 55% of Americans say they're fine with this law. They approve. And we've also seen a shift among voters saying we want more efforts with the government to help us get better-- get health care where we don't have it, make it more affordable, make health care more affordable.

So Biden wants to do some of those things. There are a lot of Democratic plans to do this. And I think Republicans standing in the way of this type of reform is just not helping them, and it keeps getting shot down. So maybe we'll see a little bit more action toward getting more people covered.

- Rick Newman, Tina Turner was correct when she's [? sang ?] [? about ?] [? you ?] "The Best." Everyone thinks it's "Simply the Best," but the song is actually called "The Best."