The mid-term elections in the United States are also known as the mid-term exams for the president of the United States and the ruling party. Mid-term elections, like presidential elections, are held every four years and are only two years apart. Most of the elections are held in November. The mid-term elections are closely linked to the upcoming presidential elections.
The United States Congress has two chambers, the Senate and the House of Representatives. The Senate lasts six years and elects a third of its members every two years. The House of Representatives has a two-year term and members of the House of Representatives are elected in virtually every general election. American policy is the separation of powers, the president controls the executive and the legislature is controlled by the two chambers. With full power, the president’s will can be fully implemented, but as long as one of the chambers is controlled by a different political party or even both chambers are controlled by opposition parties, the president’s rule will be limited or even compromised. Therefore, if the result of the elections is that the ruling party loses both houses of parliament and the opposition party also wins many governorates, it means that the people are dissatisfied with the government of the last two years.
The current political structure in the United States is dominated by the Democratic Party and the blue wave of 2020 will allow the Democratic Party to gain control of the White House, Senate and House of Representatives in one go. But with the withdrawal of US troops from Afghanistan last year, which left the country unprepared to return to Taliban control, Biden’s support dropped significantly. Subsequent inflation problems further worsened her support.
According to data from Reuters Graphics, it emerged that after last year’s summer vacation, Biden had not been able to regain more than 50% of its support, and even just 32% in the first few months. Only the subsequent promotion of some fiscal policies, such as the student loan relief, has brought back support for him, but he is still far below dissatisfaction, which could have an impact on democratic elections.
Currently the Democratic Party has an absolute majority in the Chamber of Deputies, just half of the Senate, and the vice president has more than half of the key seat. However, according to the latest prediction of 538, the Democratic Party has a high probability of losing both houses in the elections at the same time. What does this mean for investors? The central issue in these elections is inflation. Republicans have been dissatisfied with the Biden administration’s fiscal policy in recent months and disagree with current fiscal spending expansion plans. If the Republicans take back both houses, it can tend towards fiscal policy austerity.(Extended Recommended Reading: Comprehensive prediction of US midterm election results and analysis of its impact on the market)
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