Search ForexCrunch

Analysts at Rabobank point out that today 16:30 CET, President Trump is expected to make his budget request to Congress for fiscal year 2020, which starts on October 1, 2019 and will be a key event for today’s session.

Key Quotes

“The most eye catching feature of Trump’s budget is another USD 8.6 billion for the wall on the US-Mexico border. However, he also wants to boost defense spending and cut non-defense spending.”

“Obviously, the Democratic majority in the House of Representatives is not likely to grant the President his wishes. Last month, they already denied him a USD 5.7 billion request for the wall. Instead of triggering another government shutdown, Trump decided to declare a  national emergency  to divert funds to construction of the wall. The Democrats, several states and individuals are challenging the national emergency.”

“Now Trump is escalating the conflict on the wall and pressing for more money from next year’s budget. As we explained in  Return of the debt limit and sequestration, the negotiations about the budget for FY2020 will already be complicated by automatic spending cuts and are likely to get entangled with the next raise in the debt ceiling. In fact, this could lead to another game of chicken in Washington DC in September. Now the wall will be part of the game.”