The Cook Political Report has moved the Senate race in Montana between Republican Tim Sheehy and three-term Democratic incumbent Jon Tester from "toss-up" to "lean Republican.” If Sheehy can hang on and there are no surprises among other Republican incumbents running for re-election, the GOP will gain control of the Senate.
Democrats are at a huge disadvantage, having to defend 23 seats while Republicans only have to protect 11. The Democrats currently control the Senate by a 51-49 advantage, and with the retirement of Sen. Joe Manchin (I-W.Va.) in the reddest state in the nation and the probability of the Montana seat falling to the GOP, the prospects are very good for a Republican takeover.
The House is a different story. House races almost always turn on local issues and personalities. There are exceptions to that rule when national issues play a role. But there's no burning national issue that would nationalize this House election.
However, the GOP currently has an uphill climb to maintain House control. There are between 16 and 20 toss-up races (depending on the forecaster) with more than half being Republican incumbents or open Republican seats. To be sure, it's not impossible. GOP incumbents are very well financed, and a Trump win in November might carry more than a few Republican House members on his coattails.
The current odds are about 58% to 42% for the Democrats. That's liable to change the closer we get to election day.
Our current House ratings stand at 216 Democrats, 209 Republicans, and 10 tossups. While we could point to any number of factors for this, the biggest driver is simply the expanding Democratic lead on the generic congressional ballot.
To emphasize how the Democrats have taken the upper hand here, it has been nearly a full month since Republicans last led in a non-partisan poll of this metric. Between this and the Washington primary election, the last month has delivered a flurry of positive news for down-ballot Democrats. However, any majority is likely to be exceedingly narrow, as our model’s median simulation places the chamber at 221 Democrats and 214 Republicans.
The generic ballot is still very close with Democrats receiving 46.2% support while the GOP is getting 44.1%. That lead for the Democrats has narrowed in recent weeks matching the decline in Harris's momentum.
Control of the House is going to come down to four or five seats either way. Since House races aren't polled anywhere near Senate races or the presidential contest, it's hard to gauge changes in momentum.
Investors are just as up in the air as the rest of us as to which way Congress will go.
Investment firms still regard a blue sweep as something of a long shot. UBS Global Wealth Management upped its odds of a Harris victory to 55% on Aug. 16. But it only sees a 15% chance that she'll get a Democratic-controlled Congress vs. 35% odds that Donald Trump will win with a GOP Congress. Yet the Polymarket prediction site suggests the race could go any of three ways: a Republican sweep (33% odds), Harris wins but the GOP takes the Senate (28%) and a Democratic sweep (21%).
The upshot: We may be headed for an election 2024 cliffhanger with widely divergent outcomes for investors — and the economy
At this point, I think Republicans will win control of the Senate by more than two seats, and it's still just too close to call in the House.
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