A closer look at Congress
Almost as crucial as who won the presidency itself was who would take Congress.
Had Trump secured the presidency but faced a Democratic majority in either the House or the Senate, he would have been hamstrung by an unsympathetic audience. Like Obama before him, he would likely have struggled to pass his more sedate policies, let alone his dramatic ones.
All predictions suggested that the Democrats would take the Senate, and there had even been growing optimism that Trump’s Access Hollywood scandal would lead to their taking the House. This, alongside the anticipated Clinton presidency, suggested a smoother future for Democratic policy.
But the predictions were wrong.
Donald Trump secured the presidency, and the Republicans regained control of the House and the Senate – even picking up a few seats along the way. This means Trump will have an easier time when it comes to passing new bills than his predecessor, which could add to market uncertainty if he follows through on some of his more outlandish policies.
Of course, some of those policies may struggle to see the light of day regardless of congressional affiliation, simply due to budgetary restrictions. Likewise, motions that contravene Republican convention are unlikely to pass, as the GOP tries to maintain the tenets that have been upset by their nominee over the past few months.
But certain areas which have never been popular among Republicans – Obamacare, funding for certain departments and initiatives – could well face swift dismantling. Trump’s determination to reduce domestic corporate taxes and inflict greater trade tariffs upon companies that have left US soil could also take effect sooner rather than later, a move which may see stocks suffer.
For traders, this means major changes to US economic infrastructure and the uncertainty that comes with it. The Fed, too, is likely to have to react as a clean Republican sweep makes its mark, meaning closer attention than ever will be paid to future rate announcements and policy adjustments.
But even the possibility of a more amenable political landscape may be enough to see major indices and the dollar suffer. Whether or not Congress climbs on board with Trump’s stringent trade duties and debt-accelerating taxation policy, the very idea of it could be enough to keep markets in disarray for a long time to come.