A little more than eight days have passed since the American “mid-term& rdquor; and, although all optimism is premature since the strong uncertainty is the great dominant note, It seems that the world breathes something better. For three reasons. First, the elections themselves. Then, the Joe Biden-Xi Jinping meeting on Monday in the framework of the G-20 meeting in Indonesia. Third, the hope that the American Federal Reserve will be somewhat less aggressive in raising interest rates. Let us carefully review the three reasons for respite.
The belief was widespread that the Republicans – with an aggressive Donald Trump behind them – would sweep in an election in which the entire House of Representatives and a third of the Senate and state governors were renewed. Because they always punish the party that occupies the White House and because high inflation, which reached 9.1%, is the highest in more than 30 years and damages the well-being of families. Also because Biden’s approval (40%) was low and not superior to that of Obama or Clinton who, although they were later re-elected, suffered a great defeat in the ‘midterms’.
And this time the fear was greater because the Republican victory could open the door to a new term for Trump in 2024. And it has not been like that. Inflation and the worst economic expectations have weighed, but not more -especially in the female and younger electorate- than the possible restrictions on abortion after the recent ruling of a Supreme Court with a conservative majority. In the end, the censorship of Biden and the most left wing of the Democrats has counted for less than the fear of a right wing dominated by Trump who tried -with the invasion of the Capitol- to prevent the recognition of the results of the presidential elections.
The Democrats maintain – and increase – control of the Senate and the Republicans will have an important but pyrrhic victory in the House. But the relevant thing is that many candidates (including governors) promoted by Trump have bitten the dust. And so Trump, who has already announced that he will be a candidate again, has lost the aura of a winner. The Republican ‘accountants’ note that he lost the 2018 ‘midterm’ elections, the 2020 presidential elections and that in 2022 he just backfired. Y the powerful Fox chain and all the Murdoch press are already betting on Ron DeSantis, the re-elected governor of Florida who just had a great victory by beating his Democratic rival by 20 points. And while DeSantis is not a moderate Republican, he seems more balanced and less divisive than Trump.
After the defeat of Trump in the American elections, new perspectives have opened up. Even about the Ukrainian war
It would be unwise to believe that Trump is already the past, but his star has faded, allowing a breather on the international scene. The meeting between Biden and Xi Jinping at the G-20 in Bali has been relevant. It is not that the strong differences between China and America are going to disappear – and the Taiwan problem continues – but the two presidents they have opted for détente by stating that they did not want a new cold war and that they fear the harmful effects of reckless deglobalization (breakdown of trade relations between blocs). And Xi has insisted on this will in his meetings with the Australian prime minister and various European leaders. Olaf Scholz, so criticized for his recent trip to Beijing, was right. The containment of China must take into account the risks of deglobalization.
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In addition, détente between China and America is an essential condition, although perhaps not sufficient, for that the war in Ukraine does not perpetuate. A Xi pitted against Biden would have been good for Putin. In Bali the opposite has happened.
The last point of respite is the decline in inflation in the United States, which has ‘fallen’ from 9.1% in June to 7.7%. and the vice president of the Federal Reserve, Laile Brainard, has declared that the intensity of the interest rate rise (in his last four meetings he has raised it by 0.75% each time) must be softened. Perhaps in December they will rise only 0.5%. The stock markets have taken note and have interrupted their decline. And if America stops raising rates, the ECB could be more temperate in your next decisions. Will winter be less harsh?