of at least one house of Congress. That combined with a Democratic White House could lead to little getting done in Washington, which may be bad for society but could also keep the status quo on economic policy.
If Republicans do end up wining control of at least the House of Representatives, the ensuing reaction in financial markets could be modest, according to economists at Goldman Sachs. Stocks have already rallied in anticipation of it, with two straight gains of at least 1% before Election Day. But a surprise win by Democrats could upset the market if it leads investors to expect higher corporate taxes and other policy changes.
The Fed has already hiked its key overnight rate to a range of 3.75% to 4%, up from virtually zero in March, and more investors are expecting it to top 5% next year. Shares of companies entwined with the cryptocurrency economy also fell sharply, with Coinbase Global losing 10.8% and Robinhood Markets falling 19%.
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