UBS believes that a Harris victory and a divided congress is the most likely election outcome, assigning a 40% probability to this scenario.
While Harris maintains an edge over Donald Trump, the race is tightening as the election approaches. This shift in voter sentiment comes as Harris’ early momentum that allowed to close the gap “between the Republican and Democratic candidates earlier this year, but her level of support among likely voters has plateaued,” UBS added.
Trump and Harris are now in a dead heat, UBS added, with neither “candidate holding a definitive advantage as we enter the home stretch of this election cycle.”
Congress will likely be split, with Republicans expected to take control of the Senate, while Democrats are likely to hold onto the House.
“Democrats were always expected to face an uphill battle to retain control of the Senate considering the unfavorable map in this election cycle,” UBS said, adding that it has “raised the probability that control of the Senate will shift to the GOP.”
But while control of the House of Representatives is less certain, Democrats are “well-positioned in this cycle simply because there are more seats held by Republicans in districts won by Biden than seats held by Democrats in districts won by Trump,” UBS said, assigning a 65% likelihood that Democrats will assume narrow control of the House.
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