According to an analysis by National Bank of Canada strategist Angelo Katsoras, the 2026 United States midterm elections could significantly reshape policy under President Trump. Katsoras notes that the current political environment favors the Democrats, citing high inflation, rising gasoline and food prices, an unpopular war with Iran, the President’s low approval ratings, and a Democratic lead of roughly seven to eight points in the generic congressional ballot as key factors pointing to Democratic gains in the midterms [1].
The report outlines scenarios in which Democrats take control of the House alone or both chambers of Congress. It highlights that Democratic control of both chambers would represent a major political setback for the Trump administration, with implications for legislation, investigations, and executive action [1]. Losing control of both chambers could also weaken President Trump’s position within the Republican Party, especially if Republicans attribute their electoral losses to him [1].
Looking beyond the midterms, the report suggests that policy uncertainty is likely to increase as attention shifts to the priorities of the next presidential administration [1].
CONCLUSION
The analysis indicates that Democrats are well-positioned for gains in the 2026 midterms, which could lead to significant changes in legislative and executive priorities. Market participants should prepare for increased policy uncertainty as the political landscape evolves.