Domestic Politics

The US-China trade truce is getting bigger and better, but a grand strategic bargain on Iran and Taiwan is not happening.

Aggregate Senate betting market pricing appears too pessimistic on Democrats relative to state-level odds and early polling, suggesting a potential mispricing and a relatively sanguine attitude towards the still-unresolved conflict in Iran and its aftermath.

Peru is well established to elect a pro-market government in the June 7 run-off, with institutional constraints limiting left-tail policy risks. We will go long Peruvian assets when Hormuz volatility subsides.

Markets may be underpricing a bifurcated political outcome. Unless the Iran deescalation succeeds, the delayed economic fallout from the energy shock could materially worsen Republican prospects and raise the probability of a Democratic Senate victory.

President Donald Trump’s political capital is moderate, as he frontloaded his most disruptive policies within the first year. 

Checks and balances in the US political system are underrated. Social unrest and government shutdown will have fleeting market implications.  

Japan's new government will continue, but politics and foreign policy have become more competitive. 

Partisan redrawing of congressional districts will not prevent Democrats from retaking the House in the 2026 midterms. Neither will the Supreme Court's look at the Voting Rights Act.