United States: Trump’s fiscal agenda to be constrained by Democratic sweep - ING

The Democrats’ decisive US midterm election victory has delivered control of both chambers of Congress, ING economists note. In their view, the result will restrict President Trump’s domestic agenda during his final two years in office, as tax and spending proposals are likely to become mired in legislative deadlock. Further fiscal expansion looks unlikely, but sizeable budget deficits and worsening debt dynamics are expected to continue. The debt ceiling could provide a temporary constraint.

Congressional deadlock leaves fiscal risks unresolved

"With most votes counted, it's clear the Democrats have secured a decisive victory in the US midterms, claiming majorities in both the Senate and House of Representatives."

"The obvious outcome from the result on Tuesday is that a Democrat-controlled Congress will stifle President Trump’s domestic agenda in his final two years in power."

"The consequence is that spending and tax proposals, as with most domestic legislation, will likely be gridlocked."

"While we won’t see any further fiscal expansion, large fiscal deficits and deteriorating debt dynamics will continue."

"The fiscal situation will certainly remain a concern, although hitting the debt ceiling could act as a temporary brake."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)