Both Republicans and Democrats are expected to call for more aggressive government intervention in the economy after the U.S. midterm elections, according to a new analysis. With the vote that will determine the balance of power in Congress three weeks away, voter frustration over high prices and living costs has become a central political issue, leaving both parties under pressure to pursue more activist economic policies. Because the two parties favor different approaches, however, analysts warn that the uncertainty facing companies could grow.
U.S. online outlet Axios reported on the 12th, citing an analysis titled "Washington 2027 Scenarios" by global strategic advisory firm FGS Global, that political intervention in the U.S. economy could intensify after the midterms. Voter discontent over economic conditions is shaking existing policy lines, prompting both parties to adopt more interventionist platforms, the analysis said.
The specific policy directions the two parties choose are expected to differ. FGS Global said Republicans may focus on strengthening U.S. production capacity, economic security and industrial competitiveness through tariffs, industrial policy and support for domestic manufacturing. Democrats, by contrast, are expected to emphasize easing living costs, protecting workers and tightening antitrust enforcement, with the aim of curbing corporate market power and reducing inequality.
As a result, uncertainty in the business environment is unlikely to ease even after the election. FGS Global said the 2026 midterm elections mark the beginning, not the end, of 27 months in which unusually high levels of strategic uncertainty will persist.
The spread of artificial intelligence and a generational turnover in politics are also cited as key variables that will shape U.S. policy after the midterms. FGS Global said AI and related technologies could move beyond regulatory questions confined to specific industries and reshape the broader political agenda. It also noted that the emergence of a new generation of political leaders could bring changes in policy orientation and governing style.
Major U.S. media outlets have recently published a series of analyses arguing that the Republican outlook for the midterms is dimming alongside a decline in President Donald Trump's approval rating. Against that backdrop, JPMorgan presented as its most likely scenario a Republican loss of the House majority while holding the Senate. If Democrats take control of the House, constraints on the Trump administration's legislative agenda are expected to increase. In particular, confrontation between the parties over budget and fiscal legislation could deepen.
Attention is also turning to how stocks will perform after the midterms. According to JPMorgan, the Standard & Poor's 500 index has gained about 15% in the 12 months following midterm elections since 1950. The average fourth-quarter return in midterm election years was 6.6%.