Terry Jones of Issues and Insights writes about the potential political impact of recent economic news.
In the latest national online I&I/TIPP Poll, taken from Jan. 6 to Jan. 9 by 1,478 adults, Trump’s overall favorability fell to 41%, down from 44% in December, while his unfavorability rating rose to 49%, up from 47%. As such, Trump’s net favorability jumped from minus-3% in December to minus-8%. …
… Each month, I&I/TIPP also asks a second, closely related question: “In general, do you approve or disapprove of the way Donald Trump is handling his job as president, or are you not familiar enough to say one way or the other?”
Once again, as Trump enters his second year in office, the approval ratings for handling his job have weakened a bit. …
… Given the current party-based political rifts, it’s probably safe to say that 2026, with its mid-term elections, will be a make-or-break year for Trump, a politically polarizing figure, and the GOP. And both the 2026 vote and Trump’s favorability ratings will be greatly influenced by whether Trump is seen as a success or failure by a majority of Americans.
A big part of that shift, of course, will be determined by the economy.
With three interest rate cuts by the Fed already on the books in 2025, and likely more on the way, the economy might already by showing its power: according to the Atlanta Federal Reserve’s Jan. 9 “GDP Now” estimate for 2025’s fourth quarter, GDP expanded at a 5.1% rate in the final three months of the year.
Housing is already showing renewed signs of life as interest rates drop. The Treasury Department’s decision to buy $200 billion in mortgage bonds should help keep mortgage rates low for the entire year. Existing-home sales are already rebounding as rates drop.
None of these, of course, is a cure-all. But with average monthly inflation down from 2.8% year-over-year in 2024 to 2.5% in 2025, and real wages growing once again after declining President Biden’s term in office, 2026 could be the best year for the economy in a decade.
