The economy will weigh down Democrats' midterm prospects

As this November’s midterm congressional elections approach, the economy isn’t likely to improve too much.

The Federal Reserve has a dual mandate: full employment and low contained inflation, currently defined as 2%. But while the economy is operating at full employment, inflation is out of control. Irresponsible fiscal and monetary stimulus have combined to cause an embedded core inflation rate of something above 4%. The Fed will keep raising its rates aggressively. I anticipate a 50-basis-point rate hike at the September meeting. After September, its policy will depend on the data. What does that mean?