The Mid-term elections that mark the halfway point in current US President Donald Trump’s four-year term seem to have served him a bit of unexpectedly bad news, as the Democrats won control of the US House of Representatives. The Republicans maintained control of the US Senate, but already Democrats are raising points about using their House majority to push for more accountability from the President, who until now has run roughshod and alarmingly without the chance of consequence through several policy reversals from the previous administration.
On the table return matters that were briefly part of press headlines, such as the conflicts of interest that Donald Trump has possibly engaged in as both President of the US and a businessperson, in addition to his links with Russia prior to the 2016 elections and his tax returns which have so far been a set of mystery documents as far as anyone is concerned. President Donald Trump may no longer be in a position to continue talking and acting as brashly as he has in the last couple of years.
Some economists have said that should there be a case of “gridlock” with one party heading the Senate and their rivals heading the House of Representatives, it could spell reasonably good news for markets as it will mean that a great deal of uncertainty that comes with the current President will be held in check, something that markets prefer. As Chief International Economist of Deutsche Bank, Torsten Slok puts it, “With the Democrats taking over the House we will now have to see what gridlock in Congress means for policy. As for the market impact, a split Congress has historically been bullish for equities and we expect to see the same pattern again.”