Investing.com -- January is shaping up to be a key month in US politics, with some key events on the horizon.
In a note this week, TD Cowen pointed to four developments that are set to dominate headlines and potentially reshape policy directions.
Trump’s Return to the Presidency
On January 20, Donald Trump will officially begin his term as president. According to TD Cowen, "numerous executive orders" are expected on his first day, including one to freeze pending federal rulemakings.
The bank believes these orders are unlikely to impact independent agencies like the Federal Reserve. Trump is also anticipated to make key appointments to agencies such as the SEC, CFPB, and FHFA, with potential surprises in areas like immigration and international relations.
Key Financial Policy Appointments
The resumption of Trump's appointments to critical financial positions is another focus. As TD Cowen notes, “Personnel was policy in the first Trump administration,” underlining the importance of his picks for roles such as Comptroller of the Currency, FHA Director, and FDIC Chair. These appointments are expected to set the tone for financial regulation and policy in the coming months.
House Speaker Election
The GOP will work to elect a Speaker of the House, with Mike Johnson as the frontrunner. However, TD Cowen points out that the margin for victory is razor-thin, with Johnson needing 218 votes if all members participate. "The margin is so narrow that risk is elevated," TD Cowen cautions, suggesting potential turbulence in the process.
Cannabis Rescheduling Hearings
A DEA proceeding will shift to the testimony phase regarding the potential reclassification of cannabis as a Schedule 3 substance. TD Cowen expects this to generate headlines, though any final decision will rest with the Trump administration.
“We continue to believe Team Trump will back moving cannabis to Schedule 3 though we may need to wait until late in the year for action,” said the bank.