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5 surprises to watch for in 2022

Added 12-06-21 04:04:02pm EST - “Pandemic shortages could become unexpected surpluses--and abortion rights battles might generate political shock waves.” - News.yahoo.com

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Posted By TheNewsCommenter: From News.yahoo.com: “5 surprises to watch for in 2022”. Below is an excerpt from the article.

The year began with the unimaginable takeover of the U.S. Capitol by mobs of Trump supporters hoping to stop Joe Biden’s path to the presidency. They failed, and Biden began his term promising a return to normalcy after the Covid pandemic. The Covid Delta variant spoiled that picnic, and now Omicron has brought more rain. Along the way, Tom Brady won another Super Bowl, with a new team, at the age of 43. Billionaires went to space and the Taliban stunned the world by retaking control of Afghanistan.

The outlook for 2022 includes lots of uncertainty about whether the Covid virus will mutate into a new monster or eventually peter out. The Federal Reserve has finally acknowledged that worrisome levels of inflation aren’t so temporary after all, and will require more forceful Fed action in 2022. The upcoming midterm elections will dominate American politics, and former President Trump, the de facto leader of the Republican party, still looms as a biting wind able to whip sparks of dissatisfaction into destructive wildfires.

Shortages become surpluses. Inflation, currently 6.2%, still derives mainly from anomalies related to the Covid pandemic that won’t last forever. What if trends reverse and shortages become surpluses? It’s possible. Retailers are placing orders early and stocking as much as they can get. Factories are running at maximum capacity, or more. If consumer demand shifts back toward services, declining demand for goods could trigger downward price pressure. “In certain sectors, this can occur,” Michelle Meyer, chief US economist for Bank of America, told reporters during a briefing on Dec. 2. “For big-ticket items like homes and cars, I could see this play out and create that type of price correction.”

The 2021 debate was whether elevated inflation would be “transient” or “permanent.” But nobody ever defined either word, and Biden’s prediction in July that inflation would be temporary seemed mistaken a few months later, when it had gone up further instead of declining. Six or nine months into 2022, however, inflation could dissipate and fall back toward the Fed’s target of 2%. That would certainly help Biden and his fellow Democrats, who seem sure to lose control of one or both houses of Congress if consumers are still battling escalating gas, food and rent costs in November of 2022.

Abortion explodes. If the Supreme Court weakens or overturns the Roe v. Wade abortion protections next year, as seems increasingly likely, there’s bound to be blowback, perhaps on an unprecedented scale. Most Americans think there should be some restrictions on abortion, but they also want the Court to leave Roe in place. Overturning it would put the Court sharply at odds with public opinion, making an emotional issue for many voters even more visceral.

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