Name: Will Midterm Election Crash Markets? Economist Reveals Results | Matt Gertken
Uploaded: 2026-08-26T21:28:57+00:00
Duration: 1854 s

Speakers

Matt Gertken — Chief Strategist, BCA Research

Summary

Matt Gertken, Chief Geopolitical Strategist at BCA Research, argues Democrats will win both the House and Senate in the November midterms, driven by anti-incumbent anger over inflation and inequality. He sees the Treasury struggling to contain rising bond yields because intervention is small relative to the Treasury market. He also views the Canada-US trade war as mostly pre-election bluster that is ultimately positive for Canada, and notes history shows stocks fare better when the opposition controls both chambers.

Democrats are seen as overwhelming House favorites, and Gertken also calls them to win the Senate.
Republican decline is tied to inflation, affordability, tariffs, and Iran-war fuel prices.
Treasury buybacks and jawboning may not be enough to stop bond-market agitation as deficits bulge.
Historically, full opposition control of Congress has produced better 12-month real stock returns than a divided Congress.
Canada-US tariff escalation is described as mostly bluster and de-escalation, with auto tariffs likely avoided.
The trade fight is viewed as politically and economically positive for Canada through unity and infrastructure/trade integration.
Grand-strategy discussion: the US needs to preserve alliances while working with China.

Ideas

Matt Gertken Chief Strategist, BCA Research 2:21

Democrats take House majority.

The House is a foregone conclusion for Democrats: midterm elections are usually anti-incumbent, Republicans have only a two-seat majority, Democrats lead the generic ballot by about five points, and President Trump has a deeply negative approval rating. He expects 20-40 seats to shift to Democrats, giving them the House majority and the power of the purse.

Matt Gertken Chief Strategist, BCA Research 3:18

Democrats take Senate despite tough map.

He argues the Senate is basically 50/50 today but Democrats will pull it off by November 3rd. The seat map is difficult because Democrats must defend many seats from their strong 2020 cycle and win places like Maine, Michigan, Alaska, Ohio and possibly Iowa or Texas, but anti-incumbent anger over inflation and inequality drives Democratic outperformance.

Matt Gertken Chief Strategist, BCA Research 11:34

Treasury intervention insufficient; bond yields may rise.

With Congress paralyzed and tariff revenue lost, the deficit is bulging, bond markets are worried and yields are rising. Treasury buybacks of about $4 billion per operation are too small for a $30 trillion Treasury market, so intervention may backfire or be insufficient; the most the Treasury can do is try to prevent yields from blowing up before the election.

Matt Gertken Chief Strategist, BCA Research 13:00

Full opposition Congress historically better for stocks.

Historically, the US stock market's real total return over the next 12 months is better when the opposition wins both houses of Congress than when it only takes one. A full Democratic Congress would need to pass popular bipartisan legislation with Trump, reducing paralysis, while a divided Congress risks shutdowns, debt-ceiling debacles and flat spending.

Matt Gertken Chief Strategist, BCA Research 19:37

Trade war ultimately benefits Canada's economy.

He argues the Canada-US trade war is mostly bluster and de-escalation, and that the fight is good for Canada: it unites the country around Mark Carney, reduces secession risk, and enables provinces to expand infrastructure and trade ties with each other and foreign countries. The bullish case fails only if huge auto tariffs become the endgame, which he expects Trump to avoid.

Will Midterm Election Crash Markets? Economist Reveals Results | Matt Gertken

Summary

Ideas

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