Out of the Box #22: Higher for longer, yes. But not what you expect
As of writing, Congress seems to have finally found a new House Speaker in Mike Johnson. What this will amount to is of course unclear, both to media pundits and risk-takers alike, but it seems based on the preliminary post-vote comments made, that a bill backing Israel may be in the pipeline.
“We are overdue in getting that done” he stated. I am sure there will be some haggling on it between the parties but hard to see anyone voting against further spending that aligns with the Biden Administration’s foreign policy.
In fact, one could with a certain merit question if the House could produce an expense the White House would veto to fund. If such exists it surpasses my imagination.
As would the chart below probably have done if it was presented to forecasters just a couple of years or less back:
Chart 1: US Spending Unhinged, Bloomberg