Mid-term elections in the USA: balances of power and future scenarios

In the midterm elections, Democrats won larger than expected majorities in the House and Senate.

In line with our base case, control of both chambers will shift to the Democrats, but as of this writing the party has won 54 seats in the Senate and 225 in the House, with both gains likely to grow further.

A Democratic-majority Congress will subject the president's agenda to more rigorous scrutiny, but Trump has already said he intends to use the presidential veto to block any legislative initiative in this direction.

Parliamentary investigations are likely to be launched into the actions of the president and his allies, as well as into the issue of artificial intelligence safety.

The president will still retain broad powers over foreign policy matters, including any future decisions on U.S. intervention in Iran.

The frequent use of executive orders on immigration and trade policy also reduces the likelihood of significant changes in these areas.

Nonetheless, the magnitude of the shift in balance could lead Democrats to increase their ambitions in Congress.

Legislative initiatives are likely to introduce greater federal oversight of artificial intelligence and data center development, as well as measures to incentivize clean energy projects.

However, any legislative measure will have to gain bipartisan support in the Senate and avoid a presidential veto, circumstances that limit its chances of approval.

A more significant change to the regulatory framework relating to data centers is possible, however, potentially including through the revision of tax credits and less permissive zoning regulations, in light of the large Democratic victories in gubernatorial elections, including in states such as Texas and Ohio.

Democrats will use larger-than-expected majorities in the House and Senate to push for restoration of health care funding cuts passed last year as part of the One Big Beautiful Bill Act.

The restoration of this funding is probably the condition for approving further defense appropriations.

As a result, we believe a moderate easing of fiscal policy is likely.

The extent of the election result will also have repercussions on the 2028 primaries in both parties.

Trump-backed candidates performed largely well in their respective primaries, but performed significantly worse than expected in some key electoral contests.

This could encourage a wider participation of candidates in the Republican primaries.

Even the democratic panorama, for which a large list of candidates was already expected, could be characterized by greater ideological variety, in light of the successes obtained in important competitions by leading progressive representatives and moderate candidates from the Southern States.

However, a fundamental question remains: do these mid-term elections represent a transitory phenomenon in US politics, determined by voters' frustration with President Trump's political choices, or are they the signal of an expansion of the Democrats' electoral map?