Americans head to the polls today, which means that by tomorrow there will be a crop of kooky new congresspeople that may or may not keep you awake at night.
Why it matters: Comedy potential aside, the election's outcome will shape the direction of the world’s most powerful government and its economy, which does impact Canada.
Catch-up: Every seat in the House of Representatives and 35 Senate seats are up for grabs. Polls show Republicans will likely snag a House majority, but the Senate is a toss-up.
- If Republicans win control of the House, it will be difficult (if not impossible) for the current Biden administration to pass much of its legislative agenda.
- In terms of foreign policy, some Republicans have voiced support for limiting aid to Ukraine if they take control of Congress, which could change the direction of the war.
For investors, a divided government could be good news. Stocks tend to rise as the post-midterm Congressional gridlock reduces the risk of policy changes affecting business.
- But some analysts worry that a looming showdown over the debt ceiling (a limit on how much debt the US government can accumulate) could rattle markets.
Bottom line: These midterms are unlikely to produce big changes between the US and Canada… but that doesn’t mean we don’t have a friendly concern for our neighbour’s wellbeing.