United States: Why Georgia Elections Matter and How They Could Impact the North American Economy

For him President Donald Trump and their co-religionists, tomorrow will be one of the most important days since November 3 elections: the runoff in Georgia will define if republicans manage to retain a share of power with the senatorial control where are you going Democrats end up taking it all.

Georgia to define two vacancies: that of the republican senator David Perdue, who is at stake for his re-election, and that of the replacement of Johnny Isakson, who resigned his seat in 2019 due to health problems. Lost was set to keep his bank in November but did not reach the required 50%, while Kelly loeffler lost to the democrat Raphael warnock. For the moment, Democrats Jon Ossoff and Warnock lead polls by narrow margin, in line with what happened in November when Georgia, a traditionally republican state, was dyed blue. More than 3,000,000 people have already voted in advance.

If the Republicans lose both seats, then the blocs will be 50-50 and Vice President-elect Kamala Harris will take charge of the tiebreaker vote. So the elected president Joe Biden will have a free way to move his agenda forward, considering that Democrats already control the House of Representatives.

Waiting in the markets

he market he is also eager to know how the power in the new United States Congress. A victory for Democrats could mean more fiscal stimulus plans –Biden promised the last show 892 billion dollars, was a “preview” of new measures – to try to get the country out of one of the the worst economic crises in its history, product of pandemic.

Chris Woods, an executive at consulting firm Jefferies, told Reuters that a triumph of blues would mean “a growing convergence towards flexible fiscal and monetary policy“, what would have Negative implications for U.S. Treasuries and the dollar. In the case of Treasuries, the end of the long-term yield curve could rise further if the Treasury Department he must issue more new debt, do the prices go down and yields go up. As for dollar, the prospect of a increase in public spending this could lead to further weakness.

But it is also likely that changes regulatory and fiscal front: Biden has already announced that he is planning increase corporate tax from 21% to 28%, among other increases. By contrast, government spending is not expected to be cut in the short term, in fact one of its strongest proposals is the Green New Deal, a ambitious $ 2 trillion infrastructure plan so that, by 2050, the country reaches the goal of 100% clean energy and zero carbon emissions.

On the contrary, if Republicans win -traditionally more reluctant to increase public spending, as seen a few days ago when GOP senators blocked the increase in direct payments from $ 600 to $ 2,000, a request from the Asset– there could be less changes in the markets. A Republican majority in the Senate probably slow down Biden’s agenda in Congress and I could limit the impact of some of your initiatives, in particular with regard to taxes and tax assistance.

In turn, this could help maintain Treasury yields under control and pressure dollar who, for now, should continue to poorer performance compared to other currencies.

Meanwhile, the two Asset as Biden are attentive to what will happen in Georgia and will travel today to support their candidates.

Trump pressured Georgian official to find 11,180 votes for him

Asset – which Perdue convinced to enact the new aid plan, concerned about the effect the Republican president’s refusal might have on his campaign – is at the center of a new scandal, after the Washington Post revealed the details of ‘a recording where he listened to pressure Georgia Secretary of State Brad Raffensperger find enough votes and could reverse their defeat.

“The Georgian people are angry, the people of the country are angry,” Trump said. . I just want to find 11,780 votes, which is one more than we have. Because we have won the state. “

Raffensperger – who was in charge of the electoral process in his state – clarified that Georgia counted their votes three times before certifying Biden’s victory by a margin of 11,779 votes., as recorded in the recording. Raffensperger (also a Republican) reminded Trump that the state had to go to court for lawsuits brought by allies of the president and ended with a categorical: “We don’t think you won“.

The call – which took place on Saturday and lasted about an hour – is one of Trump’s latest attempts to cling to power, after the results of the November 3 elections where Biden won by 306 votes against 232 electoral votes for the current president.

In addition, since Sunday the Republican Senate bloc is immersed in a internal who could anticipate the leadership conflicts within the party Once Trump leaves the White House: against the block, a group of 12 senators led by Ted Cruz, plan challenge voters in at least six states, next Wednesday, when Congress meets to officially count the votes of the Electoral College.