Polls give Joe Biden a 5-6 point lead and betting odds convert to about a 70% probability for a Biden victory. But Hillary Clinton was leading by 3-4 points just before the 2016 election so it is still too close to call. Four out of the last five elections have been close on the popular vote and, not surprisingly, won with a smallish majority in the electoral college.
Meanwhile Democrat hopes to take the Senate come down to a handful of seats, with local factors often playing an important role. For the Senate the betting odds are very close, with quite a high chance (33%) of no overall majority which would mean that whoever is VP would provide the casting vote.
Markets seem to be positioning for a Biden win and a Democrat Senate. This is probably the most likely scenario but there are three others depending on who wins the Presidency and who takes the Senate.
If the Democrats sweep everything Biden will be in a strong position to implement his programme which points to a stimulatory policy overall, with extra spending on infrastructure, green programmes and a push for a $15 Federal minimum wage. But if he fails to gain the Senate he will be severely constrained.
If Trump gets his core vote out and scrapes in via the electoral college system he still might face a hostile Senate. But a Democrat Senate might be open to more spending on infrastructure, an ambition Trump has not followed through on so far, and also to middle class tax cuts.
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