2023 Predictions

January 19, 2023

January 19, 2023

Hello, everybody out there in farm country. This is Randy Russell sitting in for my good friend Jack Block. And now today’s commentary. January is a month to reflect on the past year and focus on the year ahead. This week I’d like to share with you five observations and predictions for 2023—from the economy to the farm bill.

So…. here they are.

First, U.S. financial markets are too optimistic. Analysts reacted to last week’s CPI for December
of 6.5% and said inflation is falling, a recession can be avoided, and therefore the Federal
Reserve will be able to cut interest rates by year end. Don’t count on it. Labor pressures remain
strong and wage rates continue to rise. The Fed will be forced to keep rates higher and for longer
than the so-called “financial experts” predict in order to bring inflation under control.

Second, China will become front and center for the U.S. both for foreign policy and economic
reasons. Whether it is critical supply chains—such as computer chips or pharmaceuticals—or the
growing national security threat, China will become a clear national priority. Keep your eye on
the House Select Committee on China, which was recently created through a strong bipartisan
vote. And look for our Asian Pacific allies—Japan, Australia, Korea, and others--to move toward
a strategic alliance to address China’s growing global influence.

Third, Congress must raise the federal debt ceiling by this summer. Recently Congress has used
special procedures to avoid open debate on our growing national debt. Not this time. The
Republican-controlled House will use the debt ceiling to force a debate on the nearly $32 trillion
in total federal debt, continuous $1.5 trillion annual deficits, and the growing threat of unchecked
entitlement program spending. You will hear much about the threat of a default by the U.S
government. But what about the threat of the mounting federal debt? The debt ceiling will be
raised, but a new fiscal blueprint needs to accompany it.

Fourth, conventional wisdom in Washington is that a farm bill won’t get done. I disagree. The
evenly divided Congress means the House and Senate must pass bipartisan farm bills narrowing
the differences between the two. Yes, there will be budget and policy challenges. Yes, there will
be lengthy and at times, contentious House and Senate floor debates. But Senate Agriculture
Committee Chair Debbie Stabenow and her House counterpart, GT Thompson, have been laying
the groundwork to get the bill done. And with Senator Stabenow retiring in 2024 and
Representative Thompson chairing his first farm bill process—both are highly motivated to get it
done by early 2024.

Finally, it is time for employees to get back to the office—and for employers to require
it—including the Federal Government. Human interaction fosters heightened collaboration and
creativity—spurring productivity and growth. In 2023, Zoom and Microsoft Teams need to be
put in the storage closet and in-person meetings once again become the norm.

This is Randy Russell reporting from Washington.

If you would like to review Jack Block’s radio shows going back more than 20 years, just go online to www.johnblockreports.com.