The U.S. Republican party has scored a midterm election victory, giving it back control of the House of Representatives. That traps Washington into two years of legislative gridlock and greases the wheels for the dollar’s coming decline, says BenWinck
For the first two years of his administration, President Joe Biden controlled both chambers of Congress. Early results show key victories for Republican candidates in Florida, Georgia, and Tennessee on Tuesday, pushing favor to the conservative party in the House.that Biden might have otherwise been inclined to push through. And, with that, the Federal Reserve becomes the sole authority charting the economy’s path. Chair Jerome Powell made it clear on Nov.
The split government also sets up a fight about America’s debt limit. Currently there’s a cap on how much the country can borrow to pay its bills. Failure to approve an increase to that limit threatens a government default. Republicans are likely to push hard against paying for certain entitlements that Democrats hold dear, like Medicare, Medicaid, and Social Security. So the government will flirt with that limit in early 2023.
Biden and his current Congress could make changes during a lame duck session. But if they don’t, and Republicans hold the line, the U.S. could come dangerously. That sets up an echo of events that preceded the debt-ceiling chaos of 2011. Then, Republicans threatened to kill a debt-limit deal after winning the House in 2010, withholding support until President Barack Obama approved a series of spending cuts. It took until July 2011 for the two parties to reach an agreement. By then the U.S.
The greenback has been unwavering. But after a 14% rally year-to-date, only U.S. political stalemate can take the wind out of its sails.Preliminary results show Republicans won seats in Florida, Georgia, and Tennessee in the midterm elections on Nov. 8, allowing the party to wrest control of the House of Representatives. The victories will bring a divided government once the next term of Congress begins in January.
The elections come after the U.S. dollar has increased 14% year-to-date versus a basket of currencies.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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