Markets Edition: Blue Wave or Ripple? What the Midterms May Change
KEY TAKEAWAYS
- The 2026 midterm elections point to a likely Democratic House and a toss-up Senate creating significant budget uncertainty and potential gridlock that will impact U.S. equity markets
- A potential Democratic sweep shifts focus to intense budget negotiations and debt limit debates increasing political risk for investors without guaranteeing a reduction in the national deficit
- Looking ahead investors face continued fiscal uncertainty and a shift in key policy fights like AI regulation to the state level while federal-level investigations may increase market volatility
Scott Chronert and Daniel Tobon consider possible outcomes of the U.S. midterm elections, the potential effects on public policy and markets, and why a lot of today's uncertainties around key issues will likely be tomorrow's uncertainties as well.
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Scott Chronert, Managing Director at Citi Research
Scott Chronert is a Managing Director at Citi Research serving several roles, including US Equity Strategist, Global Head of ETF Strategy & Analysis, and US Small/Mid Cap strategy. Scott assumed the US Equity Strategy role at Citi in October 2021. He brings a fundamental approach to assess the US equity landscape. Regarding ETFs, Scott and his team have been at the forefront of sell-side, institutional grade, analysis of the ETF ecosystem since 2012. His product covers all facets of ETFs, including broader industry trends, flow analysis, stock and market impacts, complemented with positioning views covering most asset classes and geographies. His work on US Small/Mid Cap provides a blend of top-down and stock-specific insight. Scott also contributes to Citi’s global equity strategy product. Prior to joining Citi Research in 2010, Scott spent more than 25 years in Institutional Equity Sales and Management roles (mostly at Citi). Citi was named Global ETF Research Provider of the Year 2019 by ETFexpress. Scott is a graduate of Dartmouth College, AB degree 1978 and UCLA Graduate School of Management, MBA degree 1980.
Daniel Tobon, Head of G10 FX Strategy at Citi Research
Daniel Tobon is Head of G10 FX Strategy at Citi Research. Prior to rejoining Citi, Daniel was a macro strategist at Millennium. Daniel previously worked at Citi from 2012-2021 as an FX Strategist in Citi Markets in both New York and London. He began his career at BlackRock.
