Now that Labor Day has passed, the market will focus on Washington over the next few months. Democrats will be working hard to maintain unity in order to pass the Biden administration’s economic agenda, which will not be easy given the tight margins in Congress and the complexity of passing a $3.5 trillion tax and spending package. The roughly $500 billion bipartisan infrastructure deal is also dependent on the passage of the larger plan. While the economic package gets most of the media attention, the need to increase the debt ceiling could have significant ramifications for markets, the government and policy.
Coming off August’s weak employment report released last week and considering the continued impact of the pandemic, the markets will be looking to Washington to better understand the flow of stimulus that has had a significant impact on asset prices.
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