The U.S. Capitol is reflected in a puddle on the Pennsylvania Avenue bike lane on Friday, October 02, 2020.With polls increasingly signaling a Biden victory, investors should shift their focus to Senate races,Senate election outcomes"will mean the difference between substantial fiscal expansion and fiscal gridlock," strategists led by Michael Zezas wrote in a note to clients.
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The chances of Congress passing new stimulus before Election Day are rapidly dwindling as Republicans and Democrats remain far apart in reaching a compromise. House Speaker Nancy Pelosi continues to back her party's $2.2 trillion bill and has criticized the White House's $1.8 trillion counteroffer throughout the week.
Senate Majority Leader Mitch McConnell said Tuesday he plans to vote on a smaller aid package in a piecemeal approach that goes against both the White House and Democrats' strategies. Democrats currently hold a modest polling lead for taking control of the Senate and gaining full control of Congress. Such an outcome would likely see the Biden administration push for a multitrillion-dollar stimulus measure early next year, the bank said