Industrial Bank: Democratic House Control Could Have Biggest Impact on Treasury Market

According to Jin10, Industrial Bank Chief Economist Jia Yang Groen said Democratic control of the House could have the greatest impact on the U.S. Treasury market among the possible outcomes of the U.S. midterm elections. He said losing the House and its budgetary powers would make it difficult for the Trump administration to pursue further tax cuts or other expansionary fiscal policies. Groen said the resulting fiscal-policy stalemate would reduce the likelihood of further spending increases, lower the risk of continued fiscal deterioration and limit upward pressure on long-term Treasury yields. He added that the Democrats’ narrow congressional majority, the Senate filibuster rule and the president’s veto power would significantly constrain efforts to increase spending.