- The midterm election delivered a split Congress, with the Democrats getting the control of the House of Representatives and the Senate remaining in Republicans’ hands.
- Such a scenario implies virtually no scope for big legislative action on the fiscal front. A split Congress increases the probability of a shutdown: the first such occurrence could be in Q1 2009.
- Democrats and Trump’s support may increase the likelihood of extra infrastructure spending, but finding a deal in the Congress will be hard. A much more likely outcome is some revision in drug prices.
- On trade, there should be no significant impact. The new agreement with Mexico and Canada will be passed and the Administration’s attitude toward China will not change.