Short-term gains, long-term problems in the US Short-term gains, long-term problems in the US Short-term gains, long-term problems in the US

Short-term gains, long-term problems in the US

Macro 10 minutes to read
Christopher Dembik

Head of Macroeconomic Research

Summary:  In a short-term, pre-midterms sense, the US economy is pretty much as robust President Trump claims it is. Once you dig into the details on the real estate and deficit fronts, however, the picture grows decidedly cloudier.

• The Republicans could win the midterm elections.
• The US economy is not as great as it seems; housing and autos are experiencing a significant downturn.
• The rising deficit is the US' main long-term issue.

A big win for Trump?

Anyone who has ever participated in an election campaign knows perfectly well that the last weeks of the campaign are decisive. This proves to be the case once again in the US midterms. If I had written this analysis three weeks ago, I would have certainly asserted that Democrats are likely to win a majority of seats in the House of Representatives and that the Senate should remain controlled by the Republicans. 

Over the past few weeks, the situation in the Senate has not changed.  But, to everyone’s surprise, the latest polls indicate that Republicans may be able to fend off Democrat efforts to take back control of the House. Democrats are not certain to win a majority anymore. Of the 69 seats still undecided, Republicans have reduced the voting gap to a small margin in almost all of them. Victory will depend on the outcome of the election in less than four to eight districts. 

The Democrats made a big mistake betting that the midterms would end up as a referendum on Trump. The President has done surprisingly well with a job approval close to its highest level, around 44%, while Democrats lost ground because they were unable to address local issues. 

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.