On the first day of Bidenomics, the global stock market has risen.

The moment U.S. President Joe Biden took the oath of office on the 20th (local time), New York’s three major stock markets reached a record high. On this day, the Dow Index (31,188.38), the S&P 500 (3851.85)), and the NASDAQ (13,457.25), were the highest. Wall Street welcomes the change of the owners of the White House. Marketwatch reported that “the Dow and the S&P500 are the highest in 36 years since the start of the second term of office of former President Ronald Reagan in 1985, based on the rate of increase in the inauguration of the US president.” The Nasdaq index rose the most in history on the day of the presidential inauguration.

The’Biden Rally’ has blown a warm wind to stock markets across the sea. European stock markets such as Germany and the UK rose together. Korea’s KOSPI (1.49%), Japan’s Nikkei Index (0.72%), and China’s Shanghai Index (1.07%) also rose. Seo Jeong-hoon, a researcher at Samsung Securities, analyzed, “This reflects the expectation that the Biden administration’s policies can stimulate demand not only in the US but also in the global market.

The global stock market eagerly welcomed Biden’s first start, the expectation that liquidity would remain dry for the time being. The Wall Street Journal (WSJ) reported, “Investors are optimistic that the US government and the Democratic Party will support companies affected by the novel coronavirus pandemic (Corona 19) and to release more money to boost the economy.” did. It is not an unfounded expectation. The first stimulus plan, which had already appeared, was enough to inspire such optimism. Before taking office, President Biden announced a $1.9 trillion (about 2,100 trillion won) stimulus package called the “American Rescue Plan.” Finance Minister Janet Yellen also declared aggressive fiscal spending.

Will Biden be able to save the US economy in the face of economic slowdown and the’twin crisis’ of Corona 19? It is not easy. Even if we look at the aspect of the’economic problems facing the Biden’, which the New York Times (NYT) picks, it is still being confused. The economic recovery, big-tech corporate regulation, and relations with China reached 10 points.

The most pressing task is to get rid of the scars of Corona 19. Standing in the first line is the problem of unemployment. Last month, the unemployment rate soared to 6.7%, a double before Corona 19. Although there are signs of an economic recovery, there is a high possibility that even that will lead to a K-shaped recovery, which is becoming more polarized. Reuters said, “The crisis caused by the Corona 19 pandemic will be more difficult than it was during the 2008 global financial crisis,” and pointed out that “(Biden’s economic team to solve the problem) will have to show more imagination.”

The’precise strike stimulus plan’ aimed at the class hit by the corona 19 may also face limitations. This is because you cannot unlock the money line indefinitely. When government bonds are issued to increase fiscal expenditure, bond prices fall (interest rates rise). Inflationary pressures will inevitably increase if the liquidity overflows and the economy recovers. In fact, the Federal Reserve System (Fed), which maintains zero interest rates, could be a step closer to tightening. The US CNBC predicted that “Biden’s stimulus that boosted the stock market would result in higher interest rates.”

There is a high possibility that the financialization of financial companies and the monopoly of big tech companies will also be put to a brake. This is because regulations on these companies can be strengthened to resolve the polarization of income. There is also a possibility that the tax increase for companies and high-income people will be realized at any time. It is Biden’s homework to sever relations with China, which had hit the extremes in the Donald Trump administration.

US billionaire investor Leon Cooperman told CNBC that “Bidnomics is not corporate friendly,” and that “the current stock market is intoxicated with euphoria, but it borrows happiness from the future.”

Reporter Seungho Lee [email protected]