The Zhitong Finance App learned that CICC released a research report saying that the Democratic Party won a clear victory in the US midterm elections and won control of both houses of Congress, and that the congressional checks and balances faced by the Trump administration will increase markedly in the next two years. The bank believes that this election has generally increased the possibility that the US dollar's mid-term support will weaken.
The bank pointed out that fiscal expansion and tariff policies are facing more restrictions, which may reduce additional upward pressure on US demand and inflation; foreign military actions are subject to more checks and balances, and energy risk premiums may also be reduced. Meanwhile, AI investment will continue to support US growth and asset returns, but its marginal impact on the US dollar may gradually weaken.
The bank said that room for additional fiscal stimulus is limited, and resistance to further tariff expansion is rising; if additional fiscal stimulus and tariff measures are weaker than previously anticipated, the market's pricing of US growth, inflation, and further interest rate hikes may weaken marginally.
On the AI side, regulatory scrutiny of large technology companies may be strengthened after the Democratic Party takes control of Congress, and the policy orientation and pace of promotion in various states may diverge, increasing the uncertainty of enterprise uncertainty about project approval, construction costs, and return on investment. If overseas capital slows down the new allocation of US technology assets as a result, the support of cross-border capital inflows to the US dollar may also weaken, but the federal level is unlikely to introduce a comprehensive AI moratorium, and the direct AI capital expenditure of the five major cloud vendors is expected to continue to grow. However, the growth rate may slow down, and marginal contributions may gradually decline after the investment base is raised.
The bank also said that the supply pressure on US debt will be added or eased, but the US may re-hit the debt ceiling in mid-2027, and the bipartisan game may increase the risk of shutdown and liquidity disturbances.
Geographically, congressional restrictions on military action have increased. If the risk of the US-Iran conflict escalates, the geo-risk premium on oil prices may fall back, and the US dollar's comparative energy advantage and safe-haven support previously obtained may also weaken; however, the new Congress will not officially take office until January 3, 2027, and there are still repeated risks of short-term military action and oil prices.
Overall, this election increases the possibility that the US dollar's medium term support will gradually weaken, and the subsequent impact will depend more on the actual impact of policy changes on America's relative growth and interest rate advantage.