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3 things to watch in politics this week

From government funding talks to the Fed’s meeting in December, investors have their eyes on a number of political showdowns and market events heading into the end of the year.

Here are three stories at the intersection of business and politics to watch this week.

Congress seeks to avoid government shutdown

Lawmakers must pass an estimated $1.5 trillion in funding bills by December 16 or risk a government shutdown.

The Wall Street Journal reports that Republicans and Democrats have a difference of about $26 billion in their respective versions of the budget, and Republicans say Democrats will spend a lot of money on areas such as the Internal Revenue Service (IRS). They claim they want to use it. Part of the recently passed Inflation Control Act.

UNITED STATES - DECEMBER 8: House Speaker Nancy Pelosi (D-California) and Senate Majority Leader Charles Schumer (DN.Y.) attend a bill registration ceremony after passing the Respect Marriages Act at the United States Capitol on Thursday to hold.  , December 8, 2022. The bill mandates federal protections against same-sex marriage.  (Tom Williams/CQ-Roll Call, Inc via Getty Images)

House Speaker Nancy Pelosi (Democrat, California) and Senate Majority Leader Charles Schumer (DN.Y.) address the United States Capitol on Thursday, December 8, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

House Speaker Nancy Pelosi (D-CA) said the path forward could include a yearlong series of resolutions. Such a move would postpone the broader spending dispute into the new year and give lawmakers more time to negotiate a deal.

Fed Considers Further Rate Hikes

This week, the Federal Reserve is expected to announce a rate hike of 0.50% following the central bank’s December policy meeting.

This would be a smaller increase than last month’s 75 basis point rate hike as the Federal Reserve (Fed) is looking to slow its pace of rate hikes to keep inflation in check.

The Fed’s policy decision is consistent with the latest inflation data released on Tuesday. Economists expect the Consumer Price Index (CPI) report to show US inflation continuing to slow in November.

FTX Hearing on Deck

Former crypto billionaire and FTX founder Sam Bankman-Fried says he will testify Tuesday before the House Financial Services Committee convening a hearing in light of the collapse of crypto exchanges. rice field.

Lawmakers and regulators appear to have increased the level of scrutiny surrounding the FTX meltdown, which USA Today reported affected more than one million people.

UNITED STATES - MAY 12: Sam Bankman-Fried, CEO of FTX US Derivatives, testifies at the House Committee on Agriculture hearing in Longworth Building on Thursday, May 12, 2022.  (Tom Williams/CQ-Roll Call, Inc via Getty Images)

FTX US Derivatives CEO Sam Bankman-Fried testifies before the House Committee on Agriculture on Thursday, May 12, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

The Senate Banking Committee is also scheduled to hold hearings on Wednesday as the industry faces the prospect of regulatory change. As reported by CoinDesk, one of the legislative proposals from Senators Cynthia Ramis (R-Wyoming) and Senator Kirsten Gillibrand (D-N.Y.) would make the Commodity Futures Trading Commission (CFTC) a major Aiming to become a full-fledged cryptocurrency regulator.

The CFTC is being called upon to expand its reach as lawmakers question whether the SEC applied adequate oversight of FTX or whether it was able to prevent damage from the exchange’s bankruptcy.

Senator Elizabeth Warren (D-Massachusetts) wrote in a Nov. 22 letter that the SEC needs to “respond” when it comes to oversight of cryptocurrencies. She’s already wearing a suit. “

And FTX’s implosion has another political impact, as Bloomberg reported that FTX’s bankruptcy could impact as much as $73 million in political donations.

Kevin Cirilli is Visiting Media for the Atlantic Council’s Global China Hub and Purdue’s Krach Institute for Tech Diplomacy. Follow him on LinkedIn here.

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