Biden said he 'cured the economy' days before recession fears spark market selloff
Wall Street's fear gauge is at a 4-year high
President Biden claimed to have "cured the economy" last week.
President Biden claimed to have "cured the economy" last week, days before global stocks plummeted Monday.
Biden made the comment while speaking to reporters outside the White House, saying the economy would be part of his legacy as president.
"Mr. President What do you want your legacy for Gen Z to be?" a reporter asked.
"That I cured the economy. And the environment. And a few other small things," Biden responded.
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President Biden claimed to have "cured the economy" last week, days before global stocks plummeted Monday. (Photo by Justin Sullivan/Getty Images / Getty Images)
The comment quickly became the subject of ridicule online Monday when a global market meltdown caused Wall Street's fear gauge to spike to the highest level in four years on Monday.
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The Cboe Volatility Index, or VIX, helps measure the level of fear among investors. It jumped as much as 172% to 62.27 before trading opened Monday. That marks the highest level for the index since March 2020, at the onset of the COVID-19 pandemic, when the gauge rose as high as 85.47.
The VIX index is based on the price of S&P 500 stock options and is used to measure expected volatility.
Global stocks took a massive tumble Monday morning, triggering fears of a recession on Wall Street. (Reuters/Andrew Kelly / Reuters)
Since the start of the pandemic, the VIX index has been relatively stable, never closing above 40. But it started to surge last week after the weaker-than-expected July jobs report reignited fears of a recession.
The Labor Department reported the economy added just 114,000 workers last month, while the unemployment rate jumped to 4.3%, the highest level since October 2021. The report added to mounting evidence that the economy is weakening in the face of high interest rates.
That's because the rise in unemployment triggered the so-called Sahm Rule, an indicator that is used to provide an early recession signal. The rule stipulates that a recession is likely when the three-month moving average of the jobless rate is at least a half-percentage point higher than the 12-month low.
President Joe Biden speaks on economics during the Vote To Live Prosperity Summit at the College of Southern Nevada in Las Vegas, Nevada, on July 16, 2024. (Photo by KENT NISHIMURA/AFP via Getty Images / Getty Images)
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The slowdown in job growth also raises questions about whether the Federal Reserve waited too long to cut interest rates, which are currently hovering near a 23-year high.
Policymakers voted to hold rates steady during their meeting last week, but they opened the door to a rate cut in September. More investors are now pricing in the likelihood of a bigger, 50-basis point reduction due to the sharp slowdown in job growth and the growing concerns of a recession.
Fox News' Megan Henney contributed to this report.