America’s Real Race Awaits in Congress, Where the Next President’s Policies on Taxes, Immigration, and Markets Might Meet Their Match

We’ve dealt with months of political ads, fundraising emails, and jarring political discourse — but it’s finally almost over. With just one week until the US federal election, voters are circling in their ballot bubbles. While everybody has fixated on Trump and Harris, this year’s real deciding race for the country’s fate has been narrowing.

Congressional chaos: Coinciding with the 2024 presidential election, the entire US House of Representatives and one-third of the Senate will be up for reelection — and nobody knows which party will come out on top. Currently, Republicans hold a three-seat majority in the 435-seat House, while Democrats have a one-seat majority in the 100-seat Senate. But with the election next week, polling aggregated by FiveThirtyEight shows coin-toss odds for which party will prevail.

• In the House, the GOP has a slight edge over the Democratic Party in terms of safe seats — but with the Cook Political Report stating there are 27 toss-up races, it’s anyone’s game.
• Meanwhile, in the Senate, Democrats have more seats up for reelection — which is why FiveThirtyEight forecasts Republicans are likely to win the Senate.

Gridlock Gains

The composition of Congress will determine what can get done during the first half of the next president’s term, making its outcome crucial for investors and global markets. If Congress is split between the Left and the Right — as it has been since Republicans lost their full sweep in 2016 — Citigroup suggests this could be good for investors since significant changes would be virtually impossible.

• Under these circumstances, if Kamala Harris were to win, building the budget would be easier with the House under Democratic control — but nominating new political appointees or judges would be difficult without the Senate.
• On the other hand, if Donald Trump were to win, the opposite would hold true — appointing judges and other officials would be easier, but implementing his new tariff-based tax and deportation plans would be nearly impossible.

Anything could happen: While presidential polling has shifted in Republicans’ favor leading into the campaign’s final week, Democrats have appreciated a small boost in swing state congressional elections. Races in Alaska, Nebraska, and California are among the most competitive House races up for grabs — while Senate seats in Ohio, Michigan, and Pennsylvania are likely to be decisive. The country’s next tax plan, new judges, and bipartisan regulation could be at stake — making the congressional shakeout the biggest race of the year.