How Midterm Elections Could Influence Economic Policy
Tuesday's midterm elections come as the U.S. economy sits top of mind for businesses and consumers. The Federal Reserve continues to battle stubborn inflation with aggressive rate hikes, which many economists predict will lead to a recession.
Midterm election results will determine whether Democrats or Republicans will have control of the U.S. House and Senate. "A divided government would likely bring gridlock rather than big, sweeping policy changes that could upset tax and spending plans," reads an article from AP News. "Historically, when a Democratic White House has shared power with a split or Republican Congress, stocks have seen stronger gains than usual."
The party that controls Congress will have some power regarding the government's response to the economy. Major policy issues that could be influenced by election results include the following, according to CNN:
- Tax changes
- Debt limit
- Government spending
- Social Security
- The Federal Reserve