Washington Watch: Betting markets now see Republicans winning Senate in midterm elections, as GOP slightly favored for first time in 2 months

by | Oct 13, 2022 | Stock Market

The Republican Party’s chances for taking control of the U.S. Senate after November’s midterm elections are continuing to improve, with betting market PredictIt now favoring the GOP over Democrats. Republicans have a 52% chance of winning the Senate, according to PredictIt data as of Wednesday. That’s the highest level since Aug. 1, which was the last time that the GOP was favored. (Note that PredictIt says the sum of all odds can be higher than 100%, or $1, especially when they have been changing rapidly, because they reflect most recent trades.)

Democrats had been enjoying an edge for more than two months, as shown in the chart below. Analysts had attributed the advantage in large part to Democratic-leaning voters becoming more energized after the Supreme Court’s June 24 decision overturning Roe v. Wade, the landmark abortion-rights case. Related: Democrats raise more money than Republicans in 9 out of 10 competitive Senate races, channeling voter ‘energy’ after Roe overturned

While Democrats have focused on abortion rights in their midterm campaigns, Republicans have seized on raging U.S. inflation. On Thursday, the latest reading for the consumer price index showed high inflation persisting, with so-called core CPI climbing to a new cycle peak. Stocks
DJIA,
+3.09%
dived after the reading but then turned positive. To be sure, other forecasts still suggest Democrats will maintain their grip on the 50-50 Senate, which they currently control only because Vice President Kamala Harris can cast tiebreaking votes. FiveThirtyEight currently gives a two-in-three chance for that chamber of Congress staying blue. Cowen Washington Research Group continues to see the most likely scenario being a Democratic-controlled Senate and a Republican-run House, said Chris Krueger, a Cowen analyst and managing director, in a note this week. But the Senate “comes down to a handful of coin-flip races in swing states,” he added. Related: These 3 races could determine whether Democrats or Republicans control the Senate in 2023 And see: Senate control may not be determined until December. Here’s why. Plus: Sen. Lindsey Graham’s corporate donors find themselves linked to his controversial abortion bill. Why ‘everyone’s playing gotcha with political spending.’ The additional charts below show key Senate races to watch, as well as the performance of each party in a generic congressional ballot.

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