Vice President Kamala Harris' greatest political weakness—the economy—took a back seat at a Democratic National Convention framed largely around joy, vibes and excitement. Now it will fall to Federal Reserve Chair Jerome Powell to provide some clarity when he delivers a highly anticipated speech on Friday.
Democrats did focus their convention on a number of policies, from reproductive rights to criminal justice, health care and even immigration, another weakness. But pocketbook issues like inflation and wage growth received less attention from speakers throughout the week, despite polls that show those among the pitfalls that could hobble Harris' campaign come November.
A CBS News/YouGov poll released last week found that 83% of respondents believe the economy is a major factor in this election—and that Donald Trump led among those worried about their own personal finances.
An ABC News/Washington Post poll two days later showed Trump leading Harris by 9 points, 46-37%, in trust to handle the economy.
Despite those flashing warning signs for the Democratic party, their convention was largely built around other issues intended to energize the party's base, political experts told Newsweek.
Markets are pricing in a cut of either a typical quarter-point or a more aggressive half-point drop and investors will be watching closely for any clues on the pace and size of future cuts.
Stock futures rose Friday morning ahead of the speech, with Dow Jones Industrial Average gaining 84 points (0.2%), those on the S&P 500 were up 0.4% and the Nasdaq 100 futures rose 0.6% in premarket trading. Asian shares were mixed in muted trading Friday, although Japan's benchmark Nikkei 225 rose 0.4%.
Economists note forthcoming data, especially the monthly jobs report on Sept. 6 will determine the size of further cuts beyond next month's meeting.
"We think he will seek to dampen expectations of (a half-point cut) as well as reiterate that the Fed is data-dependent and does not make decisions in advance," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
In comments reported by the Guardian, Henry Allen, a strategist at Deutsche Bank, wrote: "Last year, Powell said that they intended 'to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective'. But over the following 12 months, we've seen inflation experience a noticeable decline, along with an increase in unemployment. So from both sides of the Fed's dual mandate, we've moved much closer to a point where the Fed have cut rates in previous cycles."
And yet, there are signs of cracks forming.
This week, the Labor Department revealed that the job market is significantly weaker than it has appeared, with payroll figures revised downward by more than 800,000—a shocking 28%—for the 12 months ending in March. The Canadian government is working to resolve a rail stoppage, an X factor that could throw North American supply chains into chaos ahead of the holiday season. Consumer spending, the bedrock of the economy, has slowed as inflation-weary shoppers turn prudent.
Republican strategist Matt Klink told Newsweek that Democrats "missed a huge opportunity to discuss pocketbook issues during the convention, specifically to highlight to consumers how they will focus on lowering prices."
"Doing so won't occur by going after grocery stores and 'evil' corporations. Proving price gouging is extremely difficult to prove and rarely occurs," he said, referring to one of the concrete economic policies Harris has thus far unveiled a widely panned plan to institute price controls on grocery stores.
He said that Democrats have spent so much time on reproductive rights because they believe it will bolster Harris' standing with suburban women, a key voting bloc. He added, however, that these voters "also care about other issues, specifically the cost of food, rising insurance costs, and the high price of gasoline or a failing public education system."
"Conventions cater to the party faithful, the true believers in the party. Little effort has been made during the 2024 Chicago Convention to appeal to moderates. Democrats have focused on 'joy' and 'freedom,' but only the freedoms a more activist, powerful government, as envisioned by the Harris-Walz ticket, would provide its citizens," he said.
Indeed, in her keynote address accepting the nomination on Thursday, Harris spoke about housing costs and called for an "opportunity economy," but did not mention gas prices, grocery costs or interest rates that have affected things like Americans' ability to buy a home, insure their car or take out a loan.
Donald Trump noticed. Speaking to Fox News immediately after the speech, the former president said:
"She didn't talk about interest rates. I mean, the interest rates are now getting close to record rates. People can't do business. Nobody can borrow money. People can't go to the American dream and buy a house because they can't afford the interest rate. And even if they could, the money isn't available."
In fact, mortgage rates have been inching down as markets price in the expected interest rate cuts by the Fed.
Grant Davis Reeher, a professor of political science at Syracuse University, told Newsweek that independent voters may look back on the DNC wanting more from the party, noting that more substantive plans have been "lacking" so far.
"Staying murky on substance might be a good thing, if they can keep the honeymoon going," Reeher said. "I think many of the Democratic stands on domestic policies related to pocketbook issues might alienate them from the voters that they'll need in the battleground states. Certainly, some of the things that appeal to the base."
He noted that Harris has had less time to craft a more concrete policy platform given that she only entered the race a month ago.
"The lack of substance and definition in the campaign's message at the convention might reflect that they are still trying to figure out their stands on those economic issues, and what they are going to offer that's different," he said.
Newsweek reached out to the Harris campaign for comment via email.
Time will tell whether the limited focus on the economy in August will matter in November. Presidential elections have a way of turning on a dime—just ask Barack Obama. In 2008, as he accepted his party's nomination, the candidate crafted an acceptance speech heavy on foreign policy, slamming George W. Bush repeatedly over the Iraq War.
Less than three weeks later, Lehman Brothers collapsed.
Democrats did focus their convention on a number of policies, from reproductive rights to criminal justice, health care and even immigration, another weakness. But pocketbook issues like inflation and wage growth received less attention from speakers throughout the week, despite polls that show those among the pitfalls that could hobble Harris' campaign come November.
A CBS News/YouGov poll released last week found that 83% of respondents believe the economy is a major factor in this election—and that Donald Trump led among those worried about their own personal finances.
An ABC News/Washington Post poll two days later showed Trump leading Harris by 9 points, 46-37%, in trust to handle the economy.
Despite those flashing warning signs for the Democratic party, their convention was largely built around other issues intended to energize the party's base, political experts told Newsweek.
Markets are pricing in a cut of either a typical quarter-point or a more aggressive half-point drop and investors will be watching closely for any clues on the pace and size of future cuts.
Stock futures rose Friday morning ahead of the speech, with Dow Jones Industrial Average gaining 84 points (0.2%), those on the S&P 500 were up 0.4% and the Nasdaq 100 futures rose 0.6% in premarket trading. Asian shares were mixed in muted trading Friday, although Japan's benchmark Nikkei 225 rose 0.4%.
Economists note forthcoming data, especially the monthly jobs report on Sept. 6 will determine the size of further cuts beyond next month's meeting.
"We think he will seek to dampen expectations of (a half-point cut) as well as reiterate that the Fed is data-dependent and does not make decisions in advance," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
In comments reported by the Guardian, Henry Allen, a strategist at Deutsche Bank, wrote: "Last year, Powell said that they intended 'to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective'. But over the following 12 months, we've seen inflation experience a noticeable decline, along with an increase in unemployment. So from both sides of the Fed's dual mandate, we've moved much closer to a point where the Fed have cut rates in previous cycles."
And yet, there are signs of cracks forming.
This week, the Labor Department revealed that the job market is significantly weaker than it has appeared, with payroll figures revised downward by more than 800,000—a shocking 28%—for the 12 months ending in March. The Canadian government is working to resolve a rail stoppage, an X factor that could throw North American supply chains into chaos ahead of the holiday season. Consumer spending, the bedrock of the economy, has slowed as inflation-weary shoppers turn prudent.
Republican strategist Matt Klink told Newsweek that Democrats "missed a huge opportunity to discuss pocketbook issues during the convention, specifically to highlight to consumers how they will focus on lowering prices."
"Doing so won't occur by going after grocery stores and 'evil' corporations. Proving price gouging is extremely difficult to prove and rarely occurs," he said, referring to one of the concrete economic policies Harris has thus far unveiled a widely panned plan to institute price controls on grocery stores.
He said that Democrats have spent so much time on reproductive rights because they believe it will bolster Harris' standing with suburban women, a key voting bloc. He added, however, that these voters "also care about other issues, specifically the cost of food, rising insurance costs, and the high price of gasoline or a failing public education system."
"Conventions cater to the party faithful, the true believers in the party. Little effort has been made during the 2024 Chicago Convention to appeal to moderates. Democrats have focused on 'joy' and 'freedom,' but only the freedoms a more activist, powerful government, as envisioned by the Harris-Walz ticket, would provide its citizens," he said.
Indeed, in her keynote address accepting the nomination on Thursday, Harris spoke about housing costs and called for an "opportunity economy," but did not mention gas prices, grocery costs or interest rates that have affected things like Americans' ability to buy a home, insure their car or take out a loan.
Donald Trump noticed. Speaking to Fox News immediately after the speech, the former president said:
"She didn't talk about interest rates. I mean, the interest rates are now getting close to record rates. People can't do business. Nobody can borrow money. People can't go to the American dream and buy a house because they can't afford the interest rate. And even if they could, the money isn't available."
In fact, mortgage rates have been inching down as markets price in the expected interest rate cuts by the Fed.
Grant Davis Reeher, a professor of political science at Syracuse University, told Newsweek that independent voters may look back on the DNC wanting more from the party, noting that more substantive plans have been "lacking" so far.
"Staying murky on substance might be a good thing, if they can keep the honeymoon going," Reeher said. "I think many of the Democratic stands on domestic policies related to pocketbook issues might alienate them from the voters that they'll need in the battleground states. Certainly, some of the things that appeal to the base."
He noted that Harris has had less time to craft a more concrete policy platform given that she only entered the race a month ago.
"The lack of substance and definition in the campaign's message at the convention might reflect that they are still trying to figure out their stands on those economic issues, and what they are going to offer that's different," he said.
Newsweek reached out to the Harris campaign for comment via email.
Time will tell whether the limited focus on the economy in August will matter in November. Presidential elections have a way of turning on a dime—just ask Barack Obama. In 2008, as he accepted his party's nomination, the candidate crafted an acceptance speech heavy on foreign policy, slamming George W. Bush repeatedly over the Iraq War.
Less than three weeks later, Lehman Brothers collapsed.
