US: Political risk likely to become a drag on the economy - AmpGFX
Greg Gibbs, analyst at Amplifying Global FX Capital, suggests that the US political situation appears to be a potential drag on the health of the economy.
“Congress is now more divided with Democrats in control of the House. The Trump political agenda has shifted to border wall funding, and this has led to a government funding shut-down. There is a risk that this issue continues to drag on for some time and distract policymakers from other policy that might otherwise do something to support economic growth; such as infrastructure spending. The shut-down, if significantly prolonged could also more directly dampen economic confidence in the USA.”
“President Trump remains a highly divisive figure in US politics. It is possible to see partisan politics become increasingly poisonous over the next two years of Trump’s four-year term, with little substantive achieved in government. This could undermine confidence as the economy loses momentum and fiscal balance worsens.”