Major fiscal stimulus ahead of midterms looks unlikely

The Republican-held Congress is likely to use its sole budget reconciliation for this fiscal year to pass a narrow bill to fund Immigration and Customs Enforcement (ICE) and top up the Pentagon’s funding to account for the Iran war. Additional fiscal measures, such as the much larger rise in defence funding sought by President Trump from 2027, would likely require a new reconciliation bill during the lame-duck session following the midterms. By then, it could be a tough task to get enough lawmakers on side.