Economic News

US Consumer Sentiment and Elections

US Consumer Sentiment and Elections

Officially which party has won control of the Congress is still not known. The trends and projections, the results are pretty much in line with what was expected. Republicans take control of the House, but by a smaller margin than expected. And control of the Senate is still unknown, and will likely come down to a run-off election in Georgia.

The initial reaction from the markets wasn’t favorable, likely because of the associated uncertainty. Investors don’t like knowing what’s coming, and with control of the Senate down to a single race that had less than a percentage point of margin, doesn’t inspire confidence. Additionally, Republican control by a small margin means that maintaining consistency will be harder. It only would take convincing a small number of Representatives to change legislative outcomes.

Senate results are pending in Arizona and Nevada, both with less than 80% of the vote counted so far. Final tallies aren’t expected for days. At the moment, a republican is leading in Nevada, and a Democrat leading in Arizona. Should either of these trends reverse, then it could confirm that either party controls the Senate. If not, then the Georgia run-off election isn’t December 6.

Today, the University if Michigan reports a preview of its November survey of Consumer sentiment. The survey is on-going, and could be affected by the electoral outcome when the final version comes out later in the month. Currently consumer sentiment is expected to remain broadly healthy at 59.5, a marginal decline from 59.9 in October.

Following the election results, the expectations of what the Fed will do at their next meeting have remained largely unchanged. Only a marginal increase in the number of economists expecting a 25bps hike instead of a 50bps one.