In the recently concluded US midterm elections, President Trump’s Republican colleagues strengthened their hold in the Senate but lost the House for the first time since 2010, notes
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“Looking into 2019, retaking the House allows the Democrats to set the legislative agenda. But deep partisan divide seems likely to ensure many proposals passed by a Democrat-controlled House are blocked by a Republican-controlled Senate before ever reaching the president’s desk. Signature legislation thus faces a tough uphill battle.”
“Trump’s agenda is not necessarily crippled but it will certainly face headwinds.”
“The president will retain sweeping powers over trade policy however, meaning the US-China trade war – or perhaps eventual resolution – will not be impacted by Congress.”
“Infrastructure spending is an area long favoured by Democrats and Trump, though they remain very far apart on key details.”
“So it’s a mixed outlook, perhaps overall implying slightly slower growth, lower treasury yields and a weaker dollar. But it surely won’t be enough to stop the Fed hiking not only in Dec but probably 3 times in 2019.”
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