Final answer:
The XYZ Affair initially made the Federalist Party popular, but their subsequent actions, including passing the Alien and Sedition Acts, led to widespread opposition and their eventual decline, culminating in their loss of power after the 1800 presidential election.
Step-by-step explanation:
The XYZ Affair significantly impacted the Federalist Party in several ways. Initially, it spurred a surge in popularity for the party and President John Adams, as the public reacted with outrage at the perceived insult from the French. However, the federalist-driven response, including the passage of the Alien and Sedition Acts, ultimately led to strong public opposition and the party's decline. These acts were seen as measures to suppress the Republican press and limit the power of the Democratic-Republicans, resulting in accusations that the Federalists were overstepping and abusing governmental power.
Federalists feared French influence and saw their political opponents as potential collaborators with France, affecting how they viewed and engaged with domestic policy and national security. The heightened partisan politics contributed to growing political divisions, which were further exacerbated as Federalists opposed the Quasi-War and subsequent measures that stirred discontent. These factors played a role in the loss of the Federalist Party's power, as public sentiment shifted in favor of the Democratic-Republican Party, leading to Thomas Jefferson's victory in the 1800 presidential election and a peaceful transfer of power. In conclusion, the XYZ Affair led to short-term popularity for the Federalists but sparked controversial policies that catalyzed their eventual loss of influence and the fall of the party, especially after their opposition to the War of 1812.