Full Democratic majority in the United States: What consequences?

The fact that the Democrats have (by a narrow margin) taken control of the US Senate has consequences that need to be analysed: A persistently expansionary fiscal policy, with sharp increases in public spending; Consequently, given the low national savings rate, a massive external deficit and a major accumulation of external debt; This major accumulation of external debt will lead both to a widening of the long-term yield spread between the United States and the euro zone and to a depreciation of the dollar against all currencies; the monetary policy stance will determine the breakdown between interest rate increases and exchange rate depreciation; The question for European investors is whether or not the yield spread in favour of Treasuries will offset the depreciation of the dollar.