Round two for the elections to select the new speaker of the house elections concluded on Wed with no winner. Front runner Jim Jorden only secured 200 votes, 17 votes shy of a win in round one, and the latest round saw him down to 199 votes. Minority leader Hakeem Jefferies gained 212 votes but also fell short. Round three is expected to resume.
This could have a significant impact on global economics as the US House of Representatives Speaker is key in establishing economic policies and priorities. Their position is essential in deciding the economic trajectory of the world’s largest economy. This is due to their influence over the legislative agenda, budget, taxation, trade policies, and other economic matters.
It is becoming more likely that the newly elected speaker will announce a partial government shutdown to gain political advantage. This outcome would send shockwaves throughout global financial markets.
A government shutdown generates uncertainty surrounding the US economy’s budgetary decisions with the potential to disrupt federal services. As a result, this can lead to heightened market volatility as investors become more risk-averse and investor confidence drops. This could lead to investors pulling away from US financial markets, which could lead to a fall in asset prices as many withdraw their capital from the economy.