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# The Fed Decides the Election, Not the President
- URL: https://barbarosozturk.com/blog/the-fed-decides-the-election-not-the-president/
- Published: 2026-02-06T16:10:09.000Z
- Updated: 2026-02-06T16:10:09.000Z
- Description: In the US, patriotism ends where the grocery bill begins. The Federal Reserve has more influence on the midterms than the White House, and their "Higher for Longer" strategy is a political time bomb.
- Author: Barbaros
- Tags: Economy & Markets

### We watch the White House for political signals. We should be watching the FOMC. If the price of eggs stays high, no amount of social policy can save the incumbent.

**Inspiration:** Realizing that while the news talks about geopolitical conflicts, the average American family is only talking about their grocery bill and mortgage rate.

The media portrays US elections as a battle of ideologies—Socialism vs. Conservatism, Woke vs. Traditional.

**The reality?** It is a battle of **Wallets**.

In Europe or Asia, voters often prioritize **Collective Stability** or **Ideology**. In the US, voters are **Independent**. They prioritize **Family Wellbeing**.

Positive administration achievements (infrastructure bills, foreign policy wins) are "forgotten" instantly if unemployment rises or inflation persists.

![](https://storage.ghost.io/c/64/81/648165b7-979e-43dd-9c43-02101159f467/content/images/2026/02/ChatGPT-Image-Feb-6--2026--07_56_03-PM-Large.jpeg)

### The Independent Voter (The Decider)

The "Base" (Religious Right or Socialist Left) is locked in. They don't decide elections.

The election is decided by the 20% in the middle who vote based on **Economic Sentiment**. If they feel poor, they vote for change. Period.

![](https://storage.ghost.io/c/64/81/648165b7-979e-43dd-9c43-02101159f467/content/images/2026/02/ChatGPT-Image-Feb-6--2026--07_59_14-PM-Large.jpeg)

### The Danger of a Politicized Fed

The Federal Reserve is supposed to be independent. But it is the most dangerous political actor in the room.

- **Raising Rates:** Destroys confidence. High mortgages kill the "American Dream" of homeownership. High credit card APRs crush the working class. This hurts the incumbent.
- **Lowering Rates (Prematurely):** If they cut too early to "help" the election, inflation might spike again. This *also* hurts the incumbent.

Stating a "War on the Fed" also creates tension and backfires. It signals panic.

![](https://storage.ghost.io/c/64/81/648165b7-979e-43dd-9c43-02101159f467/content/images/2026/02/ChatGPT-Image-Feb-6--2026--08_00_50-PM-Large.jpeg)

### The "Safety" Trap (Holding Rates Too Long)

The administration and the Fed are trying to "play it safe" by holding rates steady.

**This is the most dangerous play.**

The lag effect of monetary policy is 12–18 months. By the time the data *shows* a recession, it is too late. The damage is baked in. Holding "Higher for Longer" risks breaking the labor market right before the election.

![](https://storage.ghost.io/c/64/81/648165b7-979e-43dd-9c43-02101159f467/content/images/2026/02/ChatGPT-Image-Feb-6--2026--08_04_13-PM-Large.jpeg)

### The "Slow Landing" Illusion (AI & Capex)

We saw this before. The previous administration looked like it was executing a "Soft Landing."

It wasn't policy; it was the **AI Boom**.

Massive Capex spending by Microsoft, Google, and Amazon boosted GDP artificially. Without this tech-driven spend, the high rates would have likely triggered a recession already.

**The Risk:** You cannot rely on a tech bubble to save the broader economy forever. When the Capex slows down, the real rate reality hits the consumer.

![](https://storage.ghost.io/c/64/81/648165b7-979e-43dd-9c43-02101159f467/content/images/2026/02/ChatGPT-Image-Feb-6--2026--08_07_02-PM-Large.jpeg)

### Conclusion: The Shadow Government

We watch the White House briefing room. We should be watching the FOMC meeting minutes.

**My Prediction:** If the Fed doesn't cut rates soon, the "Economic Pain" will override any "Political Win" the administration achieves. Jerome Powell has more influence on the midterms than the President.