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Stock market ‘a bummer’ for Biden approval: Yahoo Finance’s Rick Newman

Yahoo Finance’s Rick Newman joins the Live show to discuss the economic challenges the Biden administration faces amid high inflation and rising gas prices.

Video Transcript

- President Joe Biden dealing with a host of headaches. Stocks, gas, crypto all moving in the wrong directions. The question naturally, does it get worse from here? Or is this the bottom? For more, let's bring in Rick Newman of Yahoo Finance. Rick, obviously a big political conundrum all of this. But why do asset valuations matter, especially as we get closer to the midterms?

RICK NEWMAN: Well, it's a great question whether they do matter. I mean, remember how much President Trump used to talk about the stock market, especially when it was going up? Biden basically never talks about the stock market. But, look, I mean, it's becoming a bummer. We've got the S&P is almost in a bear market. The NASDAQ is in a bear market.

Stock market investors have done great for the last two years because of the Fed's stimulus, as you have covered over and over, Brian. But, look, some of these gains are evaporating. So, I mean, I think this is starting to rise to the level where it is getting general attention. And of course, inflation is a big factor here. We saw this week inflation ticked down by two points. But nobody was happy with that. We were basically hoping for a better improvement.

President Biden now says fighting inflation is his top priority. Took him a while. Maybe he should have been quicker on the draw there. But Biden just cannot do very much about inflation at this point. Meanwhile, we have gas prices hitting a new record. And what else could go wrong? Oh, we're running out of baby formula. This is a bad week for President Biden.

- Rick, I wonder if this is about messaging. Is it about changing the subject? I mean, it sounds like we have heard the White House try to peg this to different things. And most recently we've heard President Biden talk a lot about how this is tied to Russia and Ukraine, especially with energy costs. I mean, is that the key for Democrats to recover? Or is it about highlighting the positive in hopes that that outweighs the negative?

RICK NEWMAN: I mean, the so-called Putin price hike is something of a factor here. But Vladimir Putin is not responsible for most inflation. We saw gas prices get over $4 a gallon before Russia's invasion of Ukraine on February 24. And I don't think the messaging is going to make a difference. You cannot tell people that inflation is not something to worry about when they are dealing with it every day. And it's the kind of inflation that matters to people. It's food. It's energy. And it's rent.

So Biden's approval rating is in the low 40s. It is worth pointing out that there have been other presidents who dealt with inflation that was roughly this high and also had similarly low approval ratings and recovered, most notably Ronald Reagan was around these sort of low approval ratings in the early 1980s when we were just coming out of that second recession. And we all know Reagan got reelected in 1984. So it's not doom for Biden, but it doesn't look great right now.

- Yahoo Finance's Rick Newman. Thanks so much for the breakdown there. Appreciate it.