Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy, discusses the potential impact of next year's midterm elections on investors, particularly if Democrats gain control of Congress. He notes that recent off-cycle elections suggest Democrats are outperforming expectations, leading prediction markets to give them a 70% chance of winning the House. However, Zezas advises caution, stating that it's too early to strategize due to potential shifts in outcomes and voter concerns, and because significant market-moving policies are often enacted through executive action rather than legislation. He also highlights that the current policy mix, including industrial incentives, tax cuts, and AI-driven CapEx, has supported risk assets, but warns that fiscal concerns could emerge as a risk factor if growth disappoints, as there is no clear political path to address elevated U.S. deficits.
Sign in to continue reading, translating and more.
Continue
