US: Democrats likely to gain control of the House of Representatives - Nomura

With roughly two months left before the 2018 midterms, it appears increasingly likely that Democrats will gain control of the House of Representatives while the Senate remains in Republican hands, according to analysts at Nomura.

Key Quotes

“We expect this situation to result in little substantive legislation moving through Congress while lawmakers manage to avert material disruptions from fiscal policy (e.g., failing to raise the FY20 spending caps).”

“While a Democratic House may vote to impeach President Trump, we think conviction in the Senate, requiring a two-thirds majority, is unlikely. However, if Democrats gain control in the House they will likely pursue a series of investigations into the Trump administration that would generate additional headline risk and consequently dampen the likelihood of any serious bipartisanship.”

“Finally, the last section of our preview includes a list of resources to monitor leading up to November.”