Three Major Issues Before Congress Adjourns
Author: Greg Valliere
December 16, 2024
IT’S THE WEEK BEFORE CHRISTMAS, which can mean only one thing — Congress hasn’t finished its work, and is threatening a shutdown, as it does virtually every year.
HERE ARE THE THREE ISSUES that will grip Washington for the next few days:
1. Government shutdown: The current continuing resolution, keeping the government open through this Friday, will provide drama, as House Speaker Mike Johnson seeks votes from Democrats.
Several controversial issues, including farm aid, could keep Congress in town through this weekend, but a shutdown is very unlikely. The next date to watch probably will be March 14, when still another CR expires.
2. Federal Reserve: This is all the markets care about, with a rate cut virtually certain on Wednesday. With the Atlanta Fed GDP forecasting 3.3% growth this quarter, we think a 25 basis point cut is warranted.
As usual, the Fed statement and Chairman Jerome Powell’s press conference will be crucial. Is a 50 basis point move really necessary? If there’s just a 25 basis point cut, Donald Trump could howl.
3. Cabinet confirmations: This will provide the pre-holiday fireworks as hearings — not actual votes — begin in the next few days. This will drag on through New Year’s. Our odds:
Pete Hegseth to head the Pentagon — 55% chance.
Tulsi Gabard to head national security — 50-50 chance.
Robert F. Kennedy Jr. to head Health and Human Services — 45% and fading as controversy swirls around polio vaccines.
BOTTOM LINE: Vacation plans are set, so Congress will find a way to get out of town by the weekend, without figuring out what everyone in the Northeast wants to know — what the heck are those drones doing, and who sent then?
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