Latest / Balance of Power / Weekly Washington Policy Pulse: Lame Duck Deal, Crypto Clarity, Tariffs (October 26, 2026)

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Weekly Washington Policy Pulse: Lame Duck Deal, Crypto Clarity, Tariffs (October 26, 2026) · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts. Radio. News.
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  Speaker 1: This is your weekly Washington Policy Pulse on the Balance
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  Speaker 1: of Power podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence
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  Speaker 1: Senior Policy Analyst and friend of the show Nathan Dean
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  Speaker 1: shares his weekly call on upcoming catalysts in the nation's capital.
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  Speaker 1: Listen for the most recent and relevant policy research from
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  Speaker 1: our team at Bloomberg Intelligence. Now with today's installment, here's
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  Speaker 1: Nathan Dean.
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  Speaker 3: Good afternoon, everybody. My name is Nathan Dean. I'm a
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  Speaker 3: senior policy analyst with Bloomberg Intelligence here in the Washington, D.C.
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  Speaker 2: Bureau.
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  Speaker 3: I want to say welcome to the Washington Policy Pulse.
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  Speaker 3: We always appreciate you listening. We also appreciate those of
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  Speaker 3: you who are coming to us via the Balance Power podcast.
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  Speaker 3: We always, again, I think if I can use the
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  Speaker 3: word appreciate three times and 20 seconds.
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  Speaker 2: We appreciate. Oh, that's a fourth time. I'll stop.
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  Speaker 3: Today is October 26th. It's 10.02 a.m. We are in
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  Speaker 3: the thick of things. The midterm elections are just a
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  Speaker 3: week and change away. President Trump is going to be
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  Speaker 3: spending most of the week away this week, actually just
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  Speaker 3: flying around to various parts of the country. He's going
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  Speaker 3: to be Mississippi later today. He's going to be in Florida.
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  Speaker 3: He's going to be in Texas. But, you know, he
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  Speaker 3: said he's going to be in a lot of spots where,
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  Speaker 3: you know, the Republicans should be winning elections. right now,
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  Speaker 3: and that this is more of a defensive ploy than
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  Speaker 3: an offensive ploy when it comes to these midterm elections. Now,
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  Speaker 3: I just looked at the prediction markets. The Democrats right
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  Speaker 3: now have a 90.3% chance of taking the House. Again,
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  Speaker 3: I don't think that really changes anything. That has been
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  Speaker 3: pretty much 90% for the rest of, for at least
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  Speaker 3: the last month. On the Senate side, we would have
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  Speaker 3: anticipated things to actually come back a little bit closer
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  Speaker 3: to 50-50, but it's still 64%. On the democratic side
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  Speaker 3: but if anybody's been watching the Brazil elections you know
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  Speaker 3: that these prediction markets can be wrong. You know the
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  Speaker 3: Brazil elections just this past week I think most of
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  Speaker 3: the prediction markets had Bolsonaro winning obviously that wasn't the case.
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  Speaker 3: But you know if you go state by state here
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  Speaker 3: you know for the democrats to take the senate you
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  Speaker 3: have to have four seats.
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  Speaker 2: And you have to defend everybody.
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  Speaker 3: You know, Michigan, the Democrats are at 67 percent under
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  Speaker 3: Abdul Saeed. Maine, you know, the Democrat here is Troy
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  Speaker 3: Jackson is at 60 percent. Alaska, Mary Pelotola, who was
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  Speaker 3: in a car accident this week, and it's not going
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  Speaker 3: to really impact things.
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  Speaker 2: It does delay.
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  Speaker 3: She delayed a couple of her campaign stops yesterday. But
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  Speaker 3: former Representative Mary Palo Alto running against Dan Sullivan and
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  Speaker 3: the other Dan Sullivan, she's at a 76 percent chance.
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  Speaker 3: And for what it's worth, you know, obviously we saw
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  Speaker 3: President Trump and the Department of Justice file a lawsuit.
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  Speaker 3: But in reading in between the lines from our Bloomberg
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  Speaker 3: News colleagues who've been reporting on this, that lawsuit really
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  Speaker 3: isn't really much for the Democrats to be all that
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  Speaker 3: concerned about. On the Ohio side, you have 68 percent
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  Speaker 3: for the Democrats. This is former Senator Sherrod Brown. You know,
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  Speaker 3: one thing to keep in mind, you know, Senator Sherrod Brown,
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  Speaker 3: when he was here, he was chairman of the Senate
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  Speaker 3: Banking Committee. So even though that if the Democrats were
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  Speaker 3: to take the Senate, I still think Senator Elizabeth Warren
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  Speaker 3: would retain the Senate Banking Committee position. seniority, there could
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  Speaker 3: be some situations there where he could come back and say,
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  Speaker 3: I want my own committee. For what it's worth, I
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  Speaker 3: think she'll get the committee. But I just wanted to
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  Speaker 3: highlight that because I heard a couple of people talking
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  Speaker 3: about it. And then finally, in the Texas race, Representative
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  Speaker 3: Tallarico is at a 65% chance. If you take the
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  Speaker 3: prediction markets, the Democrats are sitting at a pretty decent
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  Speaker 3: spot right now. But again, you know prediction markets can
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  Speaker 3: be wrong- so we'll see what happens but it's gonna
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  Speaker 3: be fairly white week light week in terms of congressional
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  Speaker 3: policy you know everybody's out campaigning et cetera.
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  Speaker 2: Just real quickly though on the congressional front couple things
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  Speaker 2: to keep in.
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  Speaker 3: Mind is we are beginning to see a- a little
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  Speaker 3: fight if you will a debate about the leadership over
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  Speaker 3: the house financial services committee. You have Maxine Waters, who's
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  Speaker 3: been the chair and the ranking member for a long time.
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  Speaker 3: I honestly can't remember. I think it's been seven or
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  Speaker 3: eight years now that she's been over there. You have
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  Speaker 3: Representative Sean Kasten and Representative Bill Foster, who, ironically enough,
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  Speaker 3: come from the suburbs of Chicago where I grew up.
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  Speaker 3: Representative Kasten is my brother's congressman. Representative Foster is my
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  Speaker 3: dad's congressman. It's kind of a funny small world. Both
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  Speaker 3: of them are actually leading a potential challenge to Maxine
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  Speaker 3: Waters for that gavel ship. Now, if that were to happen,
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  Speaker 3: just keep in mind that Representative Kasten, he is very
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  Speaker 3: much an ESG-focused individual. Climate change is one of his
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  Speaker 3: highest priorities. We actually had him on Votes and Verdicts
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  Speaker 3: about a year ago to talk about this issue. You know,
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  Speaker 3: some of you, this is getting a little wonky, but
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  Speaker 3: he did this thing called Hot FERC Summer, meaning the
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  Speaker 3: Federal Energy Regulatory Commission. He made a little bit of
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  Speaker 3: a splash a couple of years ago talking about Hot
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  Speaker 3: FERC Summer. And then Representative Bill Foster, he's more on
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  Speaker 3: the crypto and digital assets side. He's one of those
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  Speaker 3: moderate Democrats that actually would be somewhat favorable to crypto.
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  Speaker 3: So if you are in the cryptocurrency space, this is
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  Speaker 3: a race worth fighting if the Democrats, again, take the
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  Speaker 3: House of Representatives. The way it works in Congress, on
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  Speaker 3: the Republican side, you're term limited. So you get two
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  Speaker 3: terms and then you have to take over, you have
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  Speaker 3: to leave. Democrats don't have that, but the Democrats have
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  Speaker 3: shown in the past the ability to take down chairs
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  Speaker 3: and to shuffle them out if the fundraising numbers don't
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  Speaker 3: add up, if the strategy doesn't add up, et cetera.
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  Speaker 3: So this is a possibility for one of those two
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  Speaker 3: individuals to take over the gavel at the House Financial
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  Speaker 3: Services Committee.
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  Speaker 2: But again, we'll see. That's just more D.C. gossip, etc.
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  Speaker 2: What's not D.C.
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  Speaker 3: Gossip, though, is this lame duck push from the Republicans.
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  Speaker 3: So if you see the Democrats take the House of
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  Speaker 3: Representatives on election night, you are going to see a
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  Speaker 3: push from Republicans to try and enter into a reconciliation
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  Speaker 3: package to get one more bite of the apple before
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  Speaker 3: they lose the House. And in this package, you're going
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  Speaker 3: to have around $ 70 billion for defense contractors for money
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  Speaker 3: tied to Iran. You're Honestly, I don't think either of
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  Speaker 3: those are that controversial. I mean, when you wrap it
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  Speaker 3: into larger conflict with Iran, obviously, it is a little controversial.
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  Speaker 3: But specifically, that dollar amount's not that controversial. But the
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  Speaker 3: controversial piece is increasing the debt limit and avoiding the
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  Speaker 3: debt ceiling fight that's going to come next year. Now,
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  Speaker 3: the debt ceiling fight, according to Ira Jersey, our chief
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  Speaker 3: rates strategist, is going to be sometime between the July, August,
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  Speaker 3: September timeframe next year. It really depends on how much
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  Speaker 3: inflows we get for tax season. But You know, it's
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  Speaker 3: one of those things to keep in mind. Now, the
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  Speaker 3: Republicans here want to increase the debt limit so that
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  Speaker 3: you don't have this debt ceiling fight for the rest
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  Speaker 3: of President Trump's presidency.
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  Speaker 2: And you would think that would be an easy answer.
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  Speaker 3: But Senator Tom Tillis, who's retiring, and Senator Cynthia Lummis,
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  Speaker 3: who's retiring, both on the Republican side, have both said
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  Speaker 3: that they're not voting for a debt increase. And when
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  Speaker 3: you need all the Republicans in the Senate and all
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  Speaker 3: the Republicans in the House to agree on this, I'm
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  Speaker 3: at a 30 percent chance that a reconciliation bill like
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  Speaker 3: that can go through the lame duck. lame ducks are
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  Speaker 3: for an extension lame so but that's probably the major
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  Speaker 3: thing that could be popping up in the lame duck
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  Speaker 3: I'm not seeing many other things at the moment. You
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  Speaker 3: know obviously we have the national defense authorization act we
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  Speaker 3: have the farm bill we have a highway infrastructure bill.
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  Speaker 3: Even that I'm beginning to not feel so good on,
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  Speaker 3: I think they may just kick the can on those,
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  Speaker 3: if you will. But, you know, the lame duck is
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  Speaker 3: I probably think is the or sorry, the reconciliation bill
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  Speaker 3: is probably the last major push that you're going to
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  Speaker 3: see for the Republicans if they lose the House. Now,
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  Speaker 3: over on the tariff side, I just wanted to give
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  Speaker 3: you a couple updates from our friends over at Bloomberg News.
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  Speaker 3: On the Canada tariffs, we saw President Trump just last
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  Speaker 3: week actually relax a little bit of the Canadian tariffs,
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  Speaker 3: specifically to support Senator Susan Collins in Maine. We also
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  Speaker 3: have seen reporting that the United States and Mexico are, quote-unquote,
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  Speaker 3: close to coming to a deal. But that's as far
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  Speaker 3: as Bloomberg News could get it. And so, again, I
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  Speaker 3: just want to put this out there for awareness that
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  Speaker 3: there is a potential you could see a, quote, deal.
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  Speaker 3: But again, you know, really details are a little bit
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  Speaker 3: light on that. Just two other things before I want
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  Speaker 3: to talk about crypto.
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  Speaker 2: The government, the U.S.
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  Speaker 3: Government actually put into Federal Register a rule that that
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  Speaker 3: would allow them to place government workers on administrative leave
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  Speaker 3: prior to their departures.
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  Speaker 2: The reason why this is important is.
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  Speaker 3: Because if the Democrats win Congress, etc., you're going to
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  Speaker 3: see President Trump really just, you know, he's not going
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  Speaker 3: to have anything left to, you know, he's never going
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  Speaker 3: to be on the ballot again. So he's really going
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  Speaker 3: to focus on what it is that he wants to do.
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  Speaker 3: And one of those things could actually be shrinking of
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  Speaker 3: the U.S. government again and another attempt at that. And
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  Speaker 3: so this rule would actually just went into the Federal Register,
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  Speaker 3: would allow the government to place workers on administrative leave
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  Speaker 3: pending their departures and could incentivize another fork in the.
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  Speaker 2: Road program type of thing.
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  Speaker 3: So, again, I'm just putting this out there because you
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  Speaker 3: just went to the Federal Register last week and didn't.
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  Speaker 2: Get a lot of press on it.
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  Speaker 3: And then also- on the Federal Reserve side- just real
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  Speaker 3: quickly we put a bank out. Now we put a
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  Speaker 3: note on the terminal just small one but. We wanted
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  Speaker 3: to talk about the sheet changing shifting of Federal Reserve
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  Speaker 3: bank examination- if you're a bank investor just call me
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  Speaker 3: about this and I can tell you more about it
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  Speaker 3: I don't want to go into great detail because I know.
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  Speaker 3: A lot of the folks on this call are not
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  Speaker 3: bank investors but- really what it's going to do is
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  Speaker 3: shifting examiners from the smaller banks in the regional banks
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  Speaker 3: towards the larger banks. And they're really going to be
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  Speaker 3: focused on safety and soundness. So if you're a bank
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  Speaker 3: like Bank of America and the Office of the Comptroller
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  Speaker 3: of the Currency is your number one regular, for example,
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  Speaker 3: you're probably going to have some bank examiners from the
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  Speaker 3: Federal Reserve in there as well.
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  Speaker 2: So again, that's the really small thing.
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  Speaker 3: And then finally, on the cryptocurrency side, we actually had
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  Speaker 3: two things. One is I put out on the terminal
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  Speaker 3: last week my thoughts on the CFTC's AMPR on regulation
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  Speaker 3: crypto assets this is just an AMPR this is essentially
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  Speaker 3: several questions of how the CFTC would actually go ahead
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  Speaker 3: and control and regulate cryptocurrencies I'm just going to pull
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  Speaker 3: up my note real quick just to give you the
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  Speaker 3: highlights But you know because it's in a NPR just
• 9:50
  Speaker 3: please note it has to be finalized with a proposal
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  Speaker 3: and we think that proposal is going to come in
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  Speaker 3: the first part of next year and so essentially what
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  Speaker 3: this will do is that it will create new market
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  Speaker 3: definitions there's going to be something called regulation crypto asset
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  Speaker 3: transactions which transactions fall within the jurisdiction of CFTC which
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  Speaker 3: transactions fall under the jurisdiction of the SEC and which
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  Speaker 3: transactions like Bitcoin which is a commodity falls outside because
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  Speaker 3: this does not give the CFTC the authority to regulate
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  Speaker 3: spot crypto and so you know this is one of
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  Speaker 3: those things where I looked at it and I was
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  Speaker 3: like okay this is great from the Robin Hood Coinbase
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  Speaker 3: bullish perspective It would give a clear pathway on margin
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  Speaker 3: to leverage financing for crypto, but it's not going to
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  Speaker 3: be the end all be all. And the other thing
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  Speaker 3: on crypto is the Office of the Comptroller of the
• 10:39
  Speaker 3: Currency finalized its stablecoin rule. And as a reminder, on
• 10:44
  Speaker 3: the stablecoin side, the banks were not happy because of
• 10:47
  Speaker 3: these reward programs that stablecoin issuers were dealing with Coinbase,
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  Speaker 3: for example, to create rewards because the Genius Act prohibited
• 10:55
  Speaker 3: the paying of interest or yield. But that didn't prohibit
• 10:58
  Speaker 3: somebody like Coinbase to offer a reward program that sort
• 11:01
  Speaker 3: of looked like interest or yield. But what the OCC
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  Speaker 3: did in its proposal is they said, look, any form
• 11:07
  Speaker 3: of agreement, any form of handshake between a stablecoin issuer
• 11:10
  Speaker 3: or this third-party platform would institute interest or yield. So
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  Speaker 3: if you're coming at this from the crypto sector, you
• 11:16
  Speaker 3: did not like this proposal. You're like, I'm going to sue, etc.
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  Speaker 3: They were not shy about saying that they were going
• 11:21
  Speaker 3: to sue on this. The banks were like, absolutely, we
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  Speaker 3: need to go forward with this. This is not right,
• 11:26
  Speaker 3: et cetera. We couldn't get it passed through clarity. We're
• 11:28
  Speaker 3: going to have the OCC do our work for us. Again,
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  Speaker 3: I'm just paraphrasing here. The banks actually didn't say that.
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  Speaker 3: But they didn't say we're going to have the OCC
• 11:36
  Speaker 3: do its work. So if you're on the banker's side, obviously,
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  Speaker 3: I'm just making that up. But what the OCC did
• 11:41
  Speaker 3: is they actually said, look, my children are fighting. I
• 11:46
  Speaker 3: don't like it when my children are fighting. I'm taking
• 11:47
  Speaker 3: the toy and I'm throwing it out there. And the
• 11:49
  Speaker 3: OCC said, I'm not doing anything with this. They actually
• 11:52
  Speaker 3: withdrew the provision. And so there's no provision right now
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  Speaker 3: that limits paying of interest or reward programs, et cetera.
• 11:59
  Speaker 3: The OCC essentially just finalized the rule without that. So
• 12:03
  Speaker 3: both sides are kind of not happy, but I would
• 12:04
  Speaker 3: put this in a win for the crypto sector because
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  Speaker 3: they are not going to be prohibited from issuing those
• 12:09
  Speaker 3: sorts of rewards going forward.
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  Speaker 2: That is effective. By the way, that rule is effective
• 12:14
  Speaker 2: in January.
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  Speaker 3: So, that being said, I just wanted to give you
• 12:18
  Speaker 3: two things to keep in mind for the rest of
• 12:20
  Speaker 3: this week and for next week. On Wednesday at 10 a.m., I,
• 12:24
  Speaker 3: along with my colleague Elliot Stein and colleagues from Bloomberg
• 12:27
  Speaker 3: Economics and Bloomberg NEF, are going to be doing a
• 12:29
  Speaker 3: webinar talking about everything U.S.
• 12:32
  Speaker 2: Midterms.
• 12:33
  Speaker 3: You're going to hear a lot of what I've talked
• 12:34
  Speaker 3: about in this call, but also Chris Kennedy from Bloomberg
• 12:36
  Speaker 3: Economics is going to be talking about tariffs. He's going
• 12:39
  Speaker 3: to talk about the geopolitical implications of the midterms. Derek
• 12:43
  Speaker 3: Flackall from Bloomberg NEF is going to talk a little
• 12:45
  Speaker 3: bit about clean energy implications. So that is Wednesday at
• 12:48
  Speaker 3: 10 a.m. IB me or send me a message. I'll
• 12:50
  Speaker 3: send you the link to that. And then Wednesday after
• 12:53
  Speaker 3: the elections at 10 a.m., we're going to have a
• 12:55
  Speaker 3: quick recap webinar. Again, that invite should be going out
• 12:59
  Speaker 3: fairly shortly. Look for that in my Friday newsletter. Otherwise, again,
• 13:04
  Speaker 3: shoot me a note. I'll be happy to get that
• 13:05
  Speaker 3: to you. That's 10 a.m. Eastern, Wednesday after the elections.
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  Speaker 3: So thank you very much for joining. We really appreciate it.
• 13:12
  Speaker 3: Have a wonderful week and we will talk soon.
• 13:14
  Speaker 2: Take care.
• 13:15
  Speaker 1: Our thanks to Nathan Dean, Bloomberg Intelligence Senior Policy Analyst,
• 13:19
  Speaker 1: bringing you the latest installment of his weekly Washington Policy Pulse.
• 13:23
  Speaker 1: For more from BI or to join this call live
• 13:26
  Speaker 1: each week, you can email Nathan at ndean at bloomberg.net.
• 13:31
  Speaker 1: That's N-D-E-A-N at bloomberg.net. Come back to the podcast later
• 13:35
  Speaker 1: today for the latest edition of Balance of Power.