Photo Credit: Forbes
We have all experienced the relatively meteoric rise in inflation recently; between housing, gas, food and durable goods, it is nearly impossible to deny at this point. But our area can claim that we are number one in something other than sunshine now: the Phoenix Metro area is currently #1 nationally in inflation.
It is fair to lay a lot of the blame on our overheated housing market; it has been no secret that the cost of housing has skyrocketed, as people from other states migrate here and push up housing prices, as large institutional buyers buy up properties in pursuit of a good rate of return in the rental market, and as local municipalities have leaders that are resistant to driving costs lower by building more properties. Of course, that is not the only contributing factor to inflation however.
Since midterm elections are around the corner, it is worth considering what the implications will be on our local races. As silly as it is, most voters will vote at the local level based on how they view the parties at the national level, so the implications of inflation may impact our races significantly even though our local leaders have had very little impact in either direction.
The most salient problem isn’t just inflation, it’s what the Federal Reserve will do to combat it, namely raising interest rates. While that process has begun, the staircase of higher rates has just begun and is very likely to go much further, especially as concern about the Russia/Ukraine conflict’s impact on our economy are proving to be somewhat muted. There is a good chance that that will have the effect of damping our growth, likely pushing us near a recession if not in one. And while Joe Biden will not have done it, views of Democrats will likely not be extremely strong once the election goes around.
Any shift in sentiment will be outsized here in Arizona, as Republican margins are already paper-thin: they have a one seat margin in both the House and the Senate. Especially after redistricting, where voters will often be unfamiliar with the people who want to represent them, it is uniquely likely that they will lean onto their party inclination even further, which probably does not bode well for Dems.