November US Political and Economic Typhoon Warning [Correspondent Diary]

Virginia Governor Election on the 2nd
FOMC Tapering Announcement on the 3rd
Possible Shaking of Biden's Administration Base
Start of US Monetary Policy Normalization

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Although U.S. President Joe Biden's body is in Europe, his mind is likely uneasy when thinking about Virginia.

This is because his political base could collapse within less than a year of his inauguration.

November 2 is election day in the United States. On this election day, local elections including two gubernatorial races will be held simultaneously.

The key race is undoubtedly the Virginia governor's race. Virginia is a southern U.S. state adjacent to the capital, Washington DC. Although it has been overshadowed by states like Texas and Florida with larger populations and more developed industries, Virginia is a traditional state that has been part of the United States since its founding. It has produced many presidents, including the founding father George Washington.

Virginia used to support the Republican Party, but due to demographic changes over time, it has leaned toward the Democratic Party.

Virginia also contributed to Biden's election victory, which became a stepping stone for his nationwide success.

However, the situation has completely changed one year after the November 3 presidential election last year.

Terry McAuliffe, the Democratic candidate for Virginia governor, is in a situation where he cannot guarantee victory against Republican candidate Glenn Youngkin. Despite campaign support rallies by President Biden, the First Lady, Vice President Kamala Harris, and former President Barack Obama, the situation has not improved.

According to a poll released on October 30 by Roanoke College, McAuliffe's support rate was only 1 percentage point ahead of Youngkin. A Washington Post poll released on the 29th also showed McAuliffe maintaining a narrow 1 percentage point lead.

A conservative-leaning Fox News poll released on the 28th showed Youngkin leading by 8 percentage points.

The support speech President Biden gave directly at McAuliffe's campaign rally on the 26th had no effect.

Discontent with President Biden is reflected in the governor's race. In an NBC/Wall Street Journal poll released on the 31st, Biden's job approval rating was 42%, significantly lower than the 52% disapproval rate. NBC reported that 71% of the public said the country was heading in the wrong direction just nine months after Biden's inauguration.

According to NBC, Biden's job approval rating dropped from 53% in April to 49% in August, and further down to 42% in October.

President Biden understands the significance of this election well. At McAuliffe's campaign rally, he appealed for support, saying, "I defeated Donald Trump, and McAuliffe is facing Trump's henchman."

Former President Trump is also expected to make a campaign call on the evening of November 1, the day before the election. Youngkin publicly expressed his honor to receive Trump's support and openly mentioned that he would benefit from Trump's endorsement.

Opposition to President Biden is also detected in New Jersey, which was considered a Democratic stronghold.

In New Jersey, current Governor Phil Murphy is being challenged by Republican candidate Jack Ciattarelli.

As recently as August, Murphy had about a 15 percentage point lead, but recently the gap has narrowed to a single-digit 9%. Although Murphy's support rose back to double digits after Biden visited New Jersey, it cannot be denied that Murphy's momentum has declined since summer. Unlike neighboring New York, New Jersey has elected Republican governors, and the last time a Democratic incumbent governor was re-elected was in the 1977 election.

Ciattarelli's campaign focuses on taxes. Highlighting the state's nationally highest taxes has received considerable support. Economic issues are influencing voters.

There is analysis that fatigue with Murphy's policies of raising taxes while steadily expanding welfare has increased favorability toward the Republican candidate.

New Jersey's personal income tax rate reaches 10.75%. Even New York, known for high taxes, is at 8.82%. According to U.S. media, New Jersey was the region from which the most retirees moved to other states.

During the second North Korea-U.S. summit in Hanoi, former President Trump, facing a crisis due to a congressional hearing on Michael Cohen, who betrayed him, abruptly left the summit venue and successfully shifted the narrative.

All news attention shifted from Trump's scandals to Trump himself, who caused the breakdown of the summit. Naturally, the scandal issues were forgotten.

President Biden finds it difficult to find a turning point in the crisis he faces abroad. It is widely agreed that international issues such as countering China and seeking responses to climate change with world leaders cannot satisfy U.S. voters.

Now, only two days remain until the election. The turmoil in U.S. politics is an issue that could even shake the direction of economic policy. Not only the U.S. political world but also Wall Street and the business community are paying close attention to this election.

Coincidentally, on November 2, the day of the Virginia governor's election, the Federal Reserve (Fed) is expected to hold a Federal Open Market Committee (FOMC) meeting and announce a tapering of asset purchases on the 3rd.

This is why preparations must be made for political and economic turbulence in the United States starting in November.

This content was produced with the assistance of AI translation services.