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Monday 14 September 2026 11:29 am  |  Updated:  Monday 14 September 2026 11:33 am

Schroders: congressional gridlock may prove costly this time

By: George Brown

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This year’s US midterms look set to produce a divided government in Washington. Investors have historically viewed congressional gridlock as market-friendly, but that assumption may no longer hold, says George Brown

Midterm elections are often a painful reckoning for the party in power, with current polling suggesting the Republicans are unlikely to escape that fate. President Trump’s approval ratings imply the GOP could lose control of the House of Representatives, whilst the Senate is finely balanced enough that a Democratic sweep would hardly come as a surprise. 

For investors, that would mean a return to divided government in Washington. Historically, markets have viewed such outcomes favourably. The conventional wisdom is that gridlock restrains policy risk, limits legislative surprises and reduces the scope for damaging intervention.

That assumption deserves re-examination. 

An early flashpoint for the new Congress is set........

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