Government funding bill, Fed meeting, FTX hearing: 3 things to watch in politics this week
From government funding talks to the Fed's December meeting, investors are keeping an eye on a number of political showdowns and market events heading into the year's end.
Here are three stories at the intersection of business and politics to watch this week:
Congress seeks to avoid a government shutdown
Lawmakers must pass an estimated $1.5 trillion funding bill by Dec. 16 or risk a government shutdown.
The Wall Street Journal reported that Republicans and Democrats are about $26 billion apart on their versions of the budget, with Republicans arguing that Democrats want to spend too much money on areas such as the Internal Revenue Service (IRS), which received a funding increase as part of the recently passed Inflation Reduction Act.
House Speaker Nancy Pelosi (D-CA) said that the path forward might include a year-long continuing resolution. Such a measure would punt the broader spending fight into the new year, buying lawmakers more time to negotiate a deal.
Fed weighs another rate hike
This week, the Federal Reserve is expected to announce a 0.50% interest rate hike following the central bank's December policy meeting.
That would mark a smaller increase than last month's 75 basis-point rate hike as the Fed looks to moderate the pace of rate increases in its effort to bring down inflation.
The Fed's policy decision coincides his week with the latest inflation data out Tuesday. Economists anticipate that the Consumer Price Index (CPI) report will show inflation in the U.S. continued to decelerate for the month of November.
FTX hearing on deck
Former crypto billionaire and FTX founder Sam Bankman-Fried said he will testify Tuesday before the House Financial Services Committee, which is convening a hearing in light of the crypto exchange's collapse.
Lawmakers and regulators appear to be increasing their level of scrutiny surrounding FTX's meltdown, which USA Today reported has impacted more than 1 million people.
The Senate Banking Committee will also convene a hearing on Wednesday as the industry faces the prospects of regulatory reform. One legislative proposal from Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) aims to make the Commodities Future Trading Commission (CFTC) the go-to crypto regulator, as CoinDesk reported.
The push for the CFTC to expand its scope comes as lawmakers have questioned whether the SEC applied appropriate oversight of FTX or could have prevented the damage from the exchange's bankruptcy.
Sen. Elizabeth Warren (D-MA) wrote in a Nov. 22 letter that the SEC needs to "suit up" when it comes to crypto oversight — to which SEC Chair Gary Gensler replied in an interview with Yahoo Finance last week: "We're already suited up."
And there's another political implication from the FTX implosion as Bloomberg reported that FTX's bankruptcy could impact as much as $73 million in political donations.
Kevin Cirilli is a visiting media at the Atlantic Council's Global China Hub and the Krach Institute for Tech Diplomacy at Purdue. Follow him on LinkedIn here.
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