Midterm Economic Shifts

The midterm elections, which cover all 435 seats in the House of Representatives and roughly one-third of the Senate, could reshape U.S. economic policy. A Democratic victory could increase pressure to reduce tariffs and change tax and health care policies, but passing legislation may require support from some Republicans to override a presidential veto. Annual inflation stood at 3.7% through September 2026, compared with the Federal Reserve’s 2% target, and prices could be affected by the election results, the continuation of tariffs, and immigration policies. The Senate may also shape the course of Federal Reserve appointments and interest-rate policy. Meanwhile, the impact of the congressional results on the expansion of AI data centers is expected to be gradual, with decisions by local councils remaining a major obstacle to their construction.

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