After the US midterms, what will a lame duck Trump mean for the global economy?
Summary
The article says Democrats’ midterm gains, which took control of both chambers of Congress from Republicans, could make the rest of President Donald Trump’s term politically turbulent and affect markets, inflation, interest rates and government borrowing. It says the outlook also depends on the Iran war and energy prices, while congressional gridlock could complicate federal spending decisions.Key Facts
- Investors initially reacted to the midterm results with a drop in Asian markets, followed by a rally.
- The article says uncertainty about Trump’s veto threat and possible changes in foreign policy could unsettle markets.
- It identifies AI regulation and data-center development as potential areas where Democrats may take a tougher approach.
- The article reports that U.S. headline inflation has risen to 3.7% and Brent crude remains above $100 a barrel, compared with about $70 before the war.
- The International Monetary Fund expects global headline inflation to reach 4.7% this year, with energy-importing countries facing the greatest impact.
- Investors anticipate at least one more Federal Reserve interest-rate increase, and the article says the Bank of England and European Central Bank are also expected to raise rates.
- Republicans are expected to lack the votes to confirm new appointees to public bodies, including Federal Reserve governors.
- Congress must authorize government spending by December 11 to avoid a shutdown, according to the article.
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