US: Divided congress – Danske Bank

Analysts at Danske Bank point out that the US mid-term elections are now over and the result was more or less as expected with a divided Congress with the Democrats controlling the House of Representatives and the Republicans retaining control of the Senate.

Key Quotes

“With a divided Congress, we should not expect changes to economic policy and hence we maintain our view that the implications for the economy and markets should be limited. US expansion is set to continue.”

“Trump has criticised the Fed but it is likely to continue its hiking cycle by hiking once more this year and three times next year. Democrats likely to start impeachment process but Trump is unlikely to be convicted.”

“We expect Trump to remain hawkish on foreign policy. Positive signs in US-China trade war lately with a 60% probability of a ceasefire.”