Economics
Looming Debt Ceiling Fight Risks Tipping Scales on US Recession
A game of chicken over the cap could worsen a future downturn.
Photographer: Photo illustration by 731; hoto: Getty Images
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Americans were already unhappy with the economy of 2022. Republican control of the House threatens to make 2023 worse.
The GOP is poised to win a majority of seats in the House of Representatives after this week’s midterm elections—albeit by a smaller margin than forecasters expected. That likely means less government support in the event the Federal Reserve’s steep interest-rate hikes trigger a recession as the cost of quashing the highest inflation in a generation. Not only that, but a fight over the federal debt limit risks making a potential downturn even deeper.