UBS
May 19, 2026
Election Watch 2026: Unified Government at a Crossroads
Macro ThematicEquitiesRates Govt BondsMacro Economic IndicatorsFinancialsReal Estate
The report analyzes the 2026 US midterm elections, projecting a shift to divided government and a transition in fiscal policy from stimulus to restraint.
Key Takeaways
- 1.Divided government is the most probable outcome of the 2026 midterms, likely ending two years of unified Republican control.
- 2.Fiscal policy is transitioning from stimulus to restraint, with a projected 0.6 percentage point drag on real GDP growth.
- 3.Financial markets historically trade sideways ahead of midterms, but unified government has historically delivered stronger equity returns than divided government.
Table of Contents
- Editorial
- Seats
- Scenarios
- Macroeconomic considerations
- Financial market impact
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Authors
Kurt ReimanUlrike Hoffmann-Burchardi
Securities
S&P 50010-Year Treasury NoteT-bills
Themes
US Midterm Elections 2026Fiscal Consolidation/DragGovernment Gridlock vs. Markets
Regions
North AmericaUnited States