It's election day, and voters remain concerned about how the outcome of the election will impact their finances. Issues such as retirement, housing affordability, inflation and mortgage rates are at the forefront of many voters' minds.
Bankrate Senior Economic Analyst and Washington Bureau Chief Mark Hamrick argued that the key question going forward is whether the government will remain divided, "raising the question: How much can any newly-elected president accomplish despite their promises and ambitions?" Hamrick said.
Inflation
Despite elevated inflation and high prices being a key election issue, Hamrick noted that a president has "very little power to bring inflation down."
"That’s despite the campaign promises which have broadly sounded hollow when looking for details," Hamrick said. "There’s no lever within the Oval Office to turn inflation down or off. If there were, the incumbent would likely have attended to that."
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Hamrick contended that it's important to respect the independence of the Federal Reserve, the central bank of the United States that's in charge of controlling inflation.
On the flip side, Hamrick argued that a sitting president could "do harm on the inflation front by providing too much fiscal stimulus or causing inflation through broadly applied tariffs."
Housing affordability/mortgage rates:
Housing affordability issues "are largely market driven," according to Hamrick. Given that, "there’s not much that one would envision on the policy front that would help to address the shortage of homes for sale combined with still-high mortgage rates," he continued.
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Harmick said that while candidates on both sides often talk about "reducing red tape," he noted that the main rules and regulations that hold back more housing development mostly come from state and local governments.
"At the same time, providing financial assistance to first-time homebuyers could have the unintended impact of further exacerbating the imbalance between supply and demand in the housing sector," he said, adding that "massive deportations and tariffs could add to already problematic labor shortages and drive up the cost of building materials, not helpful to prospective homebuyers."
If inflation were to be fueled by external factors, likely leading to higher mortgage rates, then housing affordability could become more challenging, he said.
Retirement:
This is another instance when candidates and many elected officials promise that Social Security benefits will be protected, Hamrick said.
He noted that nothing concrete has been "put forward to ensure that promised benefits can be paid, given the looming funding shortfall."
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If there were bipartisan agreement to strengthen Social Security funding, it would significantly boost confidence in retirement, according to Hamrick.
But at the same time, individuals must also take responsibility for their retirement savings by participating in employer-provided 401(k) programs and similar initiatives.
"Fiscal responsibility generally would be of benefit to the long-term viability of the federal budget but there aren’t a lot of hands going up in that department these days among elected officials," he continued.
