After year-long debate, the health care bill is now finally in the ink. Temporarily putting what the content of the bill aside, the poll results of the Dems doesn't seem to be good. Pres. Obama's support rate plummeted according to CNN. Also considering no Rep vote for the bill, the November midterm election is expected to be fierce. Such expectation is certainly within calculation on both sides. So in economical stand point, what is the next?
The most obvious on the bipartisan fight is that cooperation in other bills, such as the unemployment benefit bills, will be harder and longer. As a major stake on the table before November, these are going to be dragging issues on the macro economy. The Fed seemed changed their tones in economical assessment that the lower rate policy will be maintained for a while rather than that it would pull slowly shown in last meeting. Emphasis like this is more close to political than pure economical assurance.
Next to it, as it is not very easy and efficient to pass more bills on the Capital Hill, the administration would seek more administrative approaches within its rein such as China's currency. It is widely supported by both parties and other economical entities, e.g., IMF, that China should raise their currency. If the goal is reached before November, the administration certainly gets credits as it is more than currency but also million of jobs that can be re-gained. Likely following the suit, EU would press ahead about the rate too.
Based on these two factors, we should be cautious in the upcoming a few months. If the Yuan rises, Chinese exporting companies would face huge pressure and uncertainty (is the currency hike done or will slide further). For instance, STP and YGE should be avoided in the near term.
Disclosure: No positions