Bidenomics: Evolution or Revolution

As President Biden’s economic agenda—“Bidenomics”—takes center stage in Washington DC, how big of a shift in US economic policy it represents, and the economic and market implications of what actually passes, are Top of Mind. Goldman Sachs Research gets insights from Harvard’s Jason Furman, CEPR’s Dean Baker, Stanford’s David Brady, and our own analysts. Their views differ on the extent to which Bidenomics truly marks a policy shift, with Baker seeing more of a sea change than others. And despite recent progress toward a bipartisan infrastructure bill, all see major challenges to passing much of Biden’s agenda in this manner, and greater odds that more of it passes under a party-line approach, though success there too isn’t assured. Furman and Baker also disagree on the near-term economic impact—with Furman more concerned about higher inflation—but mainly agree on its longer-term benefits. One of the biggest implications could be a higher neutral interest rate, which could break, or even reverse, long-prevailing market trends.