Is the Fed Rigging the Election for Biden?

by Andrew Zatlin May 09, 2023 2:11 pm ET

The Federal Reserve isn't supposed to play politics.

But recent evidence suggests it's busy cooking the books...

In order to get Joe Biden re-elected. Let me show you...

Is the Fed Rigging the Election for Biden?

Last week, the Fed raised interest rates – again. And it suggested that more rate hikes could be coming.

Now, this may seem like old news by now. But trust me, this warrants your attention.

The Fed is continuing these rate hikes despite dismal economic data. Why?

Simple: It's rigging next year's election for Joe Biden. Let me explain...

Fudging the Numbers

At first glance, the most recent payroll data suggests our economy is in good shape. That tells the Fed that raising rates should remain a priority.

The thing is, the actual underlying data is anything but positive. In fact, it's a mess. And we've reached the point where the government is fudging the numbers to accomplish its agenda (i.e., to get Biden re-elected).

Here's how it all works...

The Fed's Strategy

Raising interest rates is a great way to slow down an economy and a stock market. And that's necessary during times of rampant inflation.

But the impact isn't immediate. It takes time – usually about six months – after raising rates to see the effect on the economy. (Keep that timing issue in mind because it's hugely important.)

Rates have been increasing for a while now. And sure enough, the economy has tumbled as a result – down from 7% growth nine months ago to a measly 2% growth now.

At this point, you might be saying, "Zatlin, you must be crazy. Everybody knows that an economic downturn is the kiss of death for sitting presidents, especially those aiming for another four years in office."

You're absolutely right. The thing is, that's not quite what's going on here...

A Goldilocks Element

You see, a key to Biden's re-election is a strong economy. But the economy can't make a dramatic rebound without first falling. And that's what the Fed is trying to accomplish.

It wants to time things precisely so that the economy goes down later this year... then rises next year heading into the election.

That means it has to be strategic when it comes to shifting from rising interest rates to cutting them.

There's a bit of a Goldilocks element to this. Slash rates too early and any economic rise will fizzle out before election season. Cut them too late and you'll miss the election altogether.

Here's the strategy that's just right...

Getting the Timing Just Right

To get re-elected, Biden needs a robust economy starting late spring/early summer of 2024. That means rate cuts need to happen no later than January or even this December – the clock is ticking.

Of course, before rate cuts can happen, there has to be some economic pain. And that pushes us back to September. Finally, before this pain sets in, we need a few months of downward trending, which brings us to our immediate future...

And puts the recent payroll data front and center. Here's why...

A Few Adjustments

Take a look at this chart:

This shows private payroll data from each April over the past 20 years. And this data has been seasonally adjusted (more on this in a moment).

Notice how this past month was one of the strongest in recent history. Amazing, right? Now look at the data before it was adjusted:

This was the worst April in the past 15 years (excluding COVID). What's going on here?

Smoothing Things Out

It's all due to seasonal adjustments. This is a method of taking raw data and smoothing it out.

Make no mistake: This method has value. For example, construction workers are often let go in the winter months when there's less building going on. But adjusting this data seasonally ensures there isn't a yearly panic over the mass exodus of workers. The construction industry may be fine, and the layoffs are normal for that time of year.

Simply put, seasonal adjustments put raw data into perspective. But they can also distort the truth.

This time, the government simply adjusted the data, which added 150,000 jobs that aren't there. And this data is what helps paint the picture that interest rates are still necessary to cool off a solid economy.

Of course, we know the truth...

Here's the Playbook

Essentially, the Fed is trying to time the economy's downfall and subsequent rise. So it's fudging the data until it's in its best interest to get things rolling down.

The playbook is simple: Come August, the Fed can start showing this massive economic downturn, then begin to set up rate cuts to help things out.

That will trigger a recession, followed by a 2024 bull market run right into election season, ending with another term for Biden.

Stick with me throughout this saga.
In fact, consider joining my "Pro" subscription where I'll reveal specific investment opportunities to profit from all of this...

Including today's, which could translate to gains of 360%.

We're in it to win it. Zatlin out.