President Joe Biden is getting his annual chance to talk directly to millions of Americans with his State of the Union address Thursday night, and he’s sure to address inflation, immigration and other issues important to voters in this election year.
His remarks are likely to have significant implications for financial markets, according to Terry Haines, a veteran Washington analyst and founder of Pangaea Policy.
A strong and stable U.S. government is fundamental to financial markets’
SPX
confidence, Haines said in a note, so “a good and even energetic” performance by the 81-year-old president “will help reassure markets and the broader public that Biden still is up to the job.”
On the other hand, a poor performance by the president “likely would shake markets because it would spike geopolitical risk and U.S. domestic political risk at a time when both already are at the highest levels in at least 50 years,” the analyst said.
Related: Inflation to stay around 3% because of geopolitical risks, BlackRock says
As November’s presidential election nears, one topic that seemingly won’t go away is how Biden’s age affects his fitness for another term. His supporters are hoping the Democratic incumbent avoids any fresh verbal gaffes and delivers a State of the Union moment like one he had last year, when he ad-libbed successfully about funding Medicare and Social Security.
Biden last year “got Republicans to agree that they didn’t want to cut Social Security and Medicare,” former Democratic strategist David Axelrod told CNN on Thursday night. “He looked like a guy who was in the moment. He needs to be that Joe Biden on Thursday.”
The Biden White House has promised that inflation will feature prominently in Thursday’s speech.
“The president will make clear in the State of the Union that he will continue fighting to lower costs for families,” White House press secretary Karine Jean-Pierre told reporters on Tuesday, as she touted the Biden administration’s new strike force that aims to battle against “corporate rip-offs.”
Stifel’s chief Washington policy strategist, Brian Gardner, said elevated prices have hurt Biden’s approval ratings, so the president will likely devote part of his speech to “deflecting blame for inflation to the private sector.”
Related: Biden adviser calls for grocery chains to bring down their profit margins, as elevated prices still sting
This year’s State of the Union address comes as immigration is increasingly viewed as an important issue for voters. It ranked as the No. 1 problem facing the country in a Gallup poll released last week.
Biden will likely “profess his newly increased desire be tough on border security” while also “blaming Congress for not letting him,” Haines said. Biden has been weighing executive actions for the U.S. southern border in recent weeks, and he visited Brownsville, Texas, last week.
A month ago, a bipartisan Senate deal that focused on border measures collapsed, hurt by opposition from former President Donald Trump, who is gearing up for a rematch against Biden in this fall’s general election. Nikki Haley, Trump’s last GOP opponent, on Wednesday suspended her campaign to become their party’s 2024 presidential nominee.
Healthcare-related topics are also expected to get plenty of mentions in Biden’s speech.
“We expect healthcare to be featured prominently, with President Biden contrasting his policies with Republicans on reproductive rights, the Affordable Care Act (ACA), and drug prices,” Kim Monk, an analyst and founding partner at Capital Alpha, said in a note.
“Abortion remains a hot-button issue in the 2024 election, and the Alabama Supreme Court ruling that embryos are children is adding fuel to the fire. Look for Biden to blame Republicans and [the Supreme Court decision in] Dobbs, and to accuse them of being responsible for potentially restricting access to [in vitro fertilization],” she said.
Related: In vitro fertilization providers in Alabama pause services after court ruling
