Sen. Ron Johnson, R-Wis., Argues that Democrats “accept honor for a good economy” but “will not take the blame if their tax increases do long-term damage.”
The National Business Economics Association (NABE)’s March 2020 economic policy survey found that almost half of respondents believe the Federal Reserve can tighten its monetary policy by the end of 2022. The survey, conducted between February 22 and March 5, is a summary of the responses of the 205 members of NABE.
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The Federal Reserve has been targeting a range of 0.0% -0.25% for the federal fund rate since March 15, 2020. The overwhelming majority of respondents (88%) expect that the next move in the target rate of the funds will be a rate increase. , while 3% expect the next move to be an interest rate cut – implying that the Fed will aim for a negative rate of federal funds.
About 46% of NABE members surveyed believe the Federal Reserve will increase its target for funds in 2022, while 12% say later this year. About 28% believe that interest rates will increase in 2023 and 12% believe that the interest rate will take place after 2023.
About 72% of respondents expect the top of the target rate of the funds to remain at 0.25%, or even lower, until the end of 2021. Only 3% of respondents expect the top of the Fed’s target band will be at 0.75. % or higher by the end of 2021, while 47% of members expect a target level of 0.75% or higher by the end of 2022. Nearly a third of respondents (30%) are looking for a higher target of 0.25% or less to continue until 2022.
Nearly three-quarters of respondents to the NABE survey, or 72%, believe that the current stance of US monetary policy is ‘about right’. About one in four respondents (26%) consider the current Fed policy to be ‘too stimulating’, compared with 20% in the August survey, while 2% say it is ‘too restrictive’.
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In terms of fiscal policy, 41% of survey respondents believe that current fiscal policy is ‘about right’, compared to 37% in the August 2020 survey. Thirty-four percent of respondents indicate that the current policy is too stimulating, compared to 17% last year. About 25% of respondents think that the current policy is too restrictive, compared to 45% in the previous survey.
About a third of respondents (38%) believe that the primary goal of current fiscal policy should be to stimulate stronger economic growth in the medium to long term, while another 31% believe that the primary goal should be be to stimulate growth as quickly as possible. possible.
About 8% of respondents believe that current fiscal policy should focus primarily on tackling income inequality, while 7% believe that reducing the deficit and debt should be the primary focus. About 64% of respondents are in favor of implementing structural policies to support stronger economic growth, while more than one-third each favor the increase in tax revenue (38%) and spending expenditure (37%). Sixteen percent believe that other steps should be taken, while 8% believe that no policy changes should be made.
The majority of respondents (67%) believe that coordination between fiscal and monetary policy is desirable, compared to 27% who think it would not be.
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Regarding the evaluation of the Congress’ fiscal response to the pandemic, 37% of respondents rate the response as inadequate, slightly lower than the 40% in NABE’s survey in August 2020, while 33% consider the response to be adequate, also slightly lower than of 37% in About 18% of respondents believe that the fiscal response of Congress is excessive, compared to 11% in the survey in August. It should be noted that the survey was conducted while the U.S. rescue plan was being considered in Congress and that all responses were submitted before the legislation was signed.
The respondents to the polls differ on the best way Congress can increase revenue. About 55% of respondents are in favor of a broad energy or carbon tax (the same share as in the August survey), while 36% support raising corporate taxes. Almost a third of the respondents (29%) benefited from an increase in social security contributions and / or medical care. Almost the same proportion of respondents support the introduction of a wealth tax (27%) or the increase of individual income tax rates (25%).
Respondents were also divided on what the top three policy priorities of the Biden administration should be for his first year in office. Nearly half of the panel members (46%) consider combating COVID-19 a top priority, followed by 40% promoting economic recovery. About 38% percent of respondents believe that infrastructure investment is a top priority, a significant increase compared to no respondents who consider it among the top three priorities in the August survey. The next important issues are the focus on climate change (30%), health care policy (25%) and immigration (22%).