Also note that we are in a similar situation as when Nixon propped up the economy before an election in 1972. It took a while for his policies to backfire. Unemployment rate was 3.5% when Nixon was elected and doubled by 1974.
The current dominating party in the US is not taking as many extreme measures as Nixon of course, but for me I want to see where the economy stands after the election dust has settled.
It's not the election, it's Black Friday that will be the bellweather, I think. If inflation is still ongoing, discounts will be minimal. If the economy is going south, sales will be tepid. Nobody is ready to lower prices permanently, but temporarily? Massive discounts are the traditional way for retailers to lower prices in times of uncertainty. The rise of the dollar and the inflation of the past year will give retailers lots of room for discounts, so I expect to see them liberally applied. And with unemployment so low and low-income wages rising so quickly, I expect to see record retail spending this month.
This Black Friday is unlikely to be any kind of bellweather. It normally takes 6-12 months after rate hikes stop for them to be felt in the broader market. Next Black Friday might be a bellweather, but I expect that we'll already be in it by then.
