Another election upends conventional wisdom

With two dozen seats in the House still undecided, control of Congress in January remains uncertain. Republicans appear to have a slight advantage in attaining majority control of the House but many races are still too close to call. In a stunning rebuke of historical precedent, many closely-contested races for the House have been decided in favor of Democrats, despite President Biden’s low job approval rating. The result represents a disappointing outcome for Republicans, who expected to garner a large majority of seats in the House but will have to manage the flow of legislation with less room for error if the party does manage to win enough seats to control the legislative agenda after the remaining contests are decided. The GOP's most conservative members would exercise significant influence in the next Congress in that event, which could pose an obstacle for votes related to the budget, foreign aid, and the debt ceiling.

Meanwhile, as dawn approached, many of the contests for the US Senate’s most competitive seats remained exceptionally close. Lieutenant Governor John Fetterman was declared the winner in the race to represent Pennsylvania in the US Senate, defeating celebrity physician Mehmet Oz. Incumbent GOP Senator Ron Johnson fended off a challenge from Democratic Lieutenant Governor Mandela Barnes in Wisconsin. Another runoff election for the US Senate will take place in Georgia on 6 December, according to the Georgia Secretary of State’s office, but Fetterman’s win in Pennsylvania provides Democrats with a margin of error as we await the result of the final two pivotal races for the Senate in Arizona and Nevada.

There were 36 gubernatorial seats on the ballot in 2022. The contest in Arizona, pitting Democrat Katie Hobbs against Republican Kari Lake, received the most media attention due in part to the latter’s persistent accusations of election fraud in the 2020 presidential contest. Hobbs appears poised to win that contest but the final vote count may not be available until later this week.

According to the US Elections Project at the University of Florida, 45.9 million voters across the US cast their ballots prior to Election Day. More than half—55%—chose to return their votes by mail. The remaining 45% voted early, but in person. Some state statutes prohibit the early tabulation of absentee and mailed ballots. In other instances, the procedures under which votes are counted are laborious, which could delay the certification of election results in the closest contests for a few days.

Governor Ron DeSantis took a victory lap after handily defeating his Democratic challenger, Charlie Crist. His win for a second term as Florida's governor positions him for a presidential bid in 2024. Meanwhile, many candidates endorsed by Donald Trump failed to meet expectations, which has led to a round of recriminations within the GOP regarding the former president’s active participation in this year’s midterm election campaign.

Originally published as a CIO blog, by Tom McLoughlin, Head of Fixed Income and Municipal Securities Americas, CIO Global Wealth Management

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