All into Account - US Midterms: Momentum Shifts Left

Thanks for tuning in. Before we get started, just a quick note that the views presented in this podcast are the views of the speakers themselves and are not the views of JPMorgan Strategic Research. We hope you enjoy the conversation.

Hello. And welcome to J.P. Morgan's All Into Account Research Channel. I'm Joyce Chang, Chair of Global Research, and I'm delighted to be doing this podcast from London, where J.P. Morgan is hosting the 10th anniversary of the European Leverage Finance Conference, a bellwether conference for us in looking at the year ahead for credit risk and for banking. And so what we've seen is a growing wave of financing that's tied to the AI boom, massive investment in new data centers, power and networking equipment, and a transformation of capital markets that's underway. One of the key sessions that we hosted the conference focused on the midterm elections and the implications. And I'm delighted to have two guest speakers with us who have been frequent guests at JP Morgan conferences in all parts of the world. So we have with us Charles Myers, who is chairman and founder of Signum Global Advisors. More than 25 years of experience in the political realm, working with presidential, Senate, House and gubernatorial races, including Hillary Clinton for president and Joe Biden for president, and also on Andrew Cuomo's mayoral campaign. Frank Kelly, who is the founder and managing partner of Fulcrum Macro Advisors, a specialist in political and regulatory risk advisory based in Washington, D.C., began his career as a presidential speechwriter for Ronald Reagan, worked under George H.W. Bush. He served in the White House Office of Political Affairs, the Justice Department Office of Policy Development, and also at the SEC. And he's also had a big role in the government relations franchises that were developed at a number of major financial institutions. So some true expertise here. I'm now going to turn the podcast over to Amy Ho and our strategic research team for today's podcast. Amy, over to you.

Thank you so much, Joyce. So now we're just a couple months away from the U.S. midterm elections, when all 435 seats in the House of Representatives and roughly one-third of the Senate will be on the ballot. Midterms are often viewed as a referendum on the sitting president, and affordability remains a major concern for voters, with the war with Iran still ongoing. Both political parties seem to already be beginning to look beyond November toward the 2028 presidential elections. Meanwhile, markets have been pretty resilient. U.S. equities remain near record highs, AI investment is robust, and capital markets activity is strong. Even as the war in Iran, elevated oil prices and fiscal concerns have driven treasury yields higher. The question is, how much the midterm results actually change the picture, particularly given the increasing use of executive power? I'm so happy to welcome my friends, Charles and Frank, to this podcast. So let's just jump right in. If the midterm elections were held today, who would control the House and who controls the Senate in your view? Maybe Charles, I can start with you.

Yeah, great. Thank you for having