What We’re Hearing
Author: Greg Valliere
December 4, 2023
Appeals and delays: There’s a widespread opinion on Capitol Hill that Trump could drag out his trials for several years. possibly serving as president during this period.
Is the Fed Really Finished? The mantra that Chairman Jerome Powell is done with rate hikes overlooks the deep hawkishness at the FOMC. We wouldn’t be surprised to see one more rate hike this winter before the Fed starts cutting rates by summer.
A Budget Deal by Jan. 19? The new leadership in the House would like to get a budget deal next week, but huge disputes loom — especially asylum/border issues. A budget deal is coming, but probably not until mid-winter.
Aid to Ukraine and Israel: New Speaker Mike Johnson has agreed to more spending for Ukraine, Israel and Taiwan; the only issues are how much of a haircut he will seek and whether it will pass before the holiday break or just before the Jan. 19 deadline.
The Congressional Elections: In an unusual twist, the Senate is likely to flip back to the Republicans, while the House probably flips back to the Democrats. The big surprise: Republicans don’t have much campaign money and both parties face a tidal wave of resignations. Is Kevin McCarthy next to go?
Democrats Cringe on Issues: Crime, illegal immigration, budget deficits, etc. — Republicans have the upper hand on key issues. But not on impeachment — that’s going nowhere, despite a new House resolution that will keep the issue alive — barely.
One Strong Suit for Democrats: Trump and DeSantis want to kill Obamacare, even though they have no alternative. DeSantis raised the issue again this weekend, to the dismay of Republicans who see an issue that could hurt them.
Likewise on Abortion, an issue that has bitterly divided Republicans and could hurt the GOP badly among voters in the north.
Democrats Will Not admit this, but polls show they’re in free-fall among young people. If this trend persists, Biden is in very deep trouble.
Washington isn’t close to AI regulation — most members of Congress don’t understand W-Fi, let alone AI.
Both parties solemnly promise to reduce budget deficits but even the right wing House Freedom Caucus has given up; deep spending cuts are simply aspirational.
Relations between the U.S. and China will be a pleasant surprise this winter.
Finally, the biggest puzzle of all — why do Americans think the economy is mediocre or worse? Politicians rant that the economy is in terrible shape, when they know it isn’t.
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