The 2026 U.S. midterm elections, ten weeks away, could shift control of Congress from Republicans to Democrats, with the latter holding roughly a six-point lead in generic ballot polls. A divided Congress would likely block any major non-bipartisan legislation and turn basic legislative tasks into prolonged negotiations. Analysts expect a standoff over raising the U.S. debt ceiling, currently set at $41.5 trillion and expected to be reached by mid-2027, which could increase Treasury market volatility. Without a congressional majority, President Trump may intensify executive actions, particularly on tariffs, adding to market uncertainty. Markets also fear a potentially contested or delayed election outcome, which would increase volatility and weigh on risky assets.
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