US: Democrats Extend Advantage On 2026 Generic Congressional Ballot
Nov-28 18:46
Democrats have extended their advantage on the 2026 generic Congressional ballot to nearly five percentage points, following a tepid month of polling for President Donald Trump and an underwhelming Republican performance at off-year elections on November 5. Note: The generic ballot asks survey respondents which party’s candidate they would vote for if the 2026 midterm elections were held that day.
- The New York Times writes, “The party out of power typically gains ground in midterm elections, and these early surveys suggest this may be taking shape ahead of 2026. Democrats lead in the vast majority of recent polls, though by single-digit margins. However, with redistricting efforts underway in several states, the national vote share that Democrats need to retake the House will depend on the extent of these changes.”
- Going into the weekend, President Trump's approval shows signs of bottoming out after plunging for much of November. According to Silver Bulletin, his approval rating is back to around -14% after hitting -15% earlier in the week. But, Silver Bulletin notes, "Americans who strongly approve of Trump is still decreasing: it hit a second term low of 24.0 percent yesterday," suggesting that Trump may be losing some support amongst his core MAGA base.
Figure 1: 2026 Generic Congressional Vote
Source: RealClearPolitics
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FED: Powell Calls Today's Action a 'Risk Management' Cut
Oct-29 18:42
- He discusses the prospects of further "risk management" cuts in terms of risks to the dual mandate, calling today's reduction also a "risk management" cut:
- " For a very long time, the risk was clearly of higher inflation. And that has changed now. And as we saw particularly after we saw after the July meeting, we saw downward revisions in job creation. We saw a very different picture of the labor market, and suggested that there were higher downside risks to the labor market than we had thought. And that suggested that policy which we had been holding, I would say modestly, other people would say moderately, restrictive level needed to move more in the direction over time of neutral. If the two goals are sort of equally at risk, then you ought to be at neutral, because one of them is calling for you to hike and one of them is calling for you to cut. So if that that got back into balance, then you'd want to be roughly at neutral. So in that sense, it was a risk management and I would say the same about today."
FOREX: US Dollar Surges on Powell's Hawkish Opening Remarks, USDJPY Back to 153
Oct-29 18:41
- The USD jumps on that last comment, that the December cut is not a foregone conclusion, most notable for USDJPY which surges through session highs to pressure the 153.00 handle once more. Significant resistance is found at 153.27.
- EURUSD also slides to a session low towards 1.16, while GBPUSD maintains its bearish tone, remaining the weakest in G10.
FED: Powell asked on Market Pricing for a Dec Rate Cut
Oct-29 18:41
- Asked about whether he is uncomfortable with market pricing assuming a December rate cut:
- "Well, as I just mentioned, a further reduction in the policy rate of December meeting is not a foregone conclusion, as I've just said. So I would say that needs to be taken on board. We had 19 participants on the committee. Everyone works very hard at this and takes their obligations to serve the American people very seriously. And at a time when we have tension between our two goals, we have strong views across the committee. And as I mentioned, they were strongly different views today. And the takeaway from that is that we haven't made a decision about December, and you know, we're going to be looking at the data that we have, how that affects the outlook and the balance of risks. And I'll just say that."
