Joe Biden has been elected the 46th President of the United States, but the Blue Wave implied by pre-election polls did not come to pass. Democrats hold a narrower majority in the House of Representatives and Republicans appear likely to maintain their Senate majority.
Markets reacted positively to the prospect of a divided Congress, which would impose bipartisanship constraints on some of Biden’s less investor-friendly policies.
In their November commentary, Mackenzie’s Chief Economist Todd Mattina and Economist Jules Boudreau examine how a divided Congress may be a good thing for long-run economic growth. They expect the two parties could find common ground on issues including:
• Providing at least modest stimulus to dampen the economic effects of COVID-19
• Long-awaited infrastructure spending
• Benign onshoring policies
For more timely insights from Todd and Jules, read their November commentary, “Markets rally on a split Congress”.