A Recess Like No Other
Author: Greg Valliere
July 24, 2025
CONGRESS USUALLY LEAVES TOWN around Aug. 1 and returns in the first week of September — but not this year. The explosive Epstein scandal has changed the narrative.
THE HOUSE WANTS TO LEAVE within the next day or two, and Speaker Mike Johnson is likely to comply with an unusually long recess. The Democrats, thrilled to have an issue to exploit, want to stay.
ONE THING SEEMS CERTAIN: There’s an unusually large agenda this year. Some issues and predictions —
WORK HAS ALREADY BEGUN ON THE BUDGET, with a growing threat of a shutdown ahead of the Oct. 1 target. This annual fight may result in a spending freeze.
THE ASSAULT ON JEROME POWELL WILL PERSIST, as Donald Trump visits the very expensive Fed headquarters this afternoon.
MORE TARIFF DEALS ARE LIKELY — AT THE LEAST some “agreements in principle.” A deal with Canada is an uphill task but in general the markets will learn to live with higher tariffs.
REPUBLICANS WILL HAVE A ROCKY FIVE WEEKS with their constituents, so they will revert to the playbook — calling for a capital gains tax cut, a very big issue for the sluggish housing industry.
TECH INDUSTRY GIANTS will continue to have a smooth ride with Congress. which is not inclined to toughen regulations.
POSTURING FOR THE 2026 CONGRESSIONAL ELECTIONS will begin; the Republicans were looking good until the Epstein scandal hit.
NEGOTIATIONS BETWEEN THE U.S. and Russia are possible in late August, but a genuine breakthrough looks unlikely.
THE STARVATION IN GAZA may subside as Trump demands Israeli food shipments to the region.
THE BIG MARKET STORY MAY PERSIST — a continued solid stork market thanks to a surprisingly strong economy and good corporate earnings.
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