It’s has already been an unbelievable year in politics.
Investors are now asking: what will happen next?
Independent investment firm Compass Point Research and Trading published a report Monday addressing the top client questions.
It said: “We spent last few days making the rounds to assess both the practical and legislative impacts of ongoing House GOP leadership turmoil.”
Scroll down to read about the five issues that are on investors’ minds.
'If you ask five people in D.C. who will have the speaker's gavel in December you will hear at least eight different answer,' the analysts said.
Compass Point threw out a few names that have been mentioned repeatedly:
1. A reluctant Rep. Paul Ryan (R-Wisconsin)
2. a big-name such as Newt Gingrich, J.C. Watts, or Dick Cheney could return as a 'caretaker' -- though Compass Point thinks that's less likely
3. A currently serving House representative
'If we had to put our chips down on the House GOP leadership roulette table today, we would split them equally between Rep. Ryan and the field,' analysts wrote.
No, says Compass Point analysts.
'Given that Speaker Boehner will keep the gavel until there is leadership clarity, we do not view the November 5 debt ceiling deadline as particularly worrisome. Our sense is that if the House GOP leadership issue is unresolved by the end of the month, then Speaker Boehner will embrace a short-term debt ceiling deal likely punting the issue to mid-December.'
Although onlookers shouldn't be too concerned about the November 5 debt ceiling deadline, Compass Point said a mid-December fiscal crisis is increasingly likely.
'Our base case remains that lawmakers will realign the debt ceiling deadline with the December 11 federal government spending deadline which could result in both debt ceiling brinkmanship and possibly another government shutdown,' they wrote.
'Our view remains that the debt ceiling will be addressed in advance of any upcoming deadlines, but we expect the political conversation to become considerably worse before a deal emerges,' Compass Point said.
'In recent years we have operated under a form of blind political faith that a debt ceiling deal would emerge at the eleventh hour,' the analysts wrote. 'We are still clinging to that faith despite ongoing leadership uncertainty.'
'A lengthy government shutdown during the FOMC's December meeting will surely give some voters pause, since the 2013 government shutdown shaved ~0.25 percentage points off the annualized GDP growth rate,' the analysts wrote.
'If the FOMC leaves rates unchanged in October, its next meeting could be during a federal government shutdown which would complicate the committee's decision and likely lessen the odds of liftoff in 2015.'
The FOMC is scheduled to meet starting October 27 and December 15, while the
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