Recorded on November 10, 2026.
Join Mike Silverman and special guest Dan Clifton, Partner and Head of Policy Research at Strategas Securities, for Cresset’s Post-Midterm Market Update. Drawing on Dan’s deep expertise in policy, politics, and financial markets, the conversation will unpack the election results and explore what the shifting policy landscape could mean for the economy, markets, and investors in the months ahead.
In this timely post-midterm election discussion, Cresset’s Mike Silverman welcomed Dan Clifton, Head of Policy Research at Baird Strategas, to examine the shifting political landscape and its implications for markets, economic policy, and investors. The conversation explored the forces behind a significant Democratic electoral victory, the prospects for bipartisan compromise, and the evolving policy priorities shaping the next two years. From artificial intelligence infrastructure and interest rates to tax policy, government spending, and geopolitical tensions, Clifton offered perspective on the risks and opportunities emerging from a changing political environment, while highlighting the importance of looking beyond near-term uncertainty to understand the longer-term forces influencing the economy and financial markets.
Key Topics
Economic Frustration Drives Political Change
Clifton identified slower economic growth and persistent affordability concerns as central forces behind continued political volatility. With voters repeatedly shifting power between parties over the past two decades, the midterm results reinforced the importance of economic conditions in shaping political outcomes. The scale of Democratic gains also suggested a more moderate governing coalition than markets had initially anticipated.
Divided Government Creates Opportunities for Compromise
Despite expectations for heightened political conflict and congressional investigations, the discussion highlighted potential opportunities for bipartisan cooperation. Upcoming budget negotiations and the debt ceiling could create pressure for compromise on healthcare, affordability, government spending, and other policy priorities. Clifton emphasized that the growing influence of moderate lawmakers may help create pathways for legislative agreements, even in a polarized political environment.
AI Infrastructure Faces Growing Political Headwinds
The rapid expansion of artificial intelligence infrastructure has become an increasingly important driver of investment, construction activity, and economic growth. However, growing local opposition to data centers, driven by concerns over electricity costs, water resources, and community impact, is creating new challenges. Clifton suggested that regulatory uncertainty and state-level policy changes could delay projects and modestly reduce capital spending, although the broader AI infrastructure buildout remains a significant long-term investment theme.
Market Volatility Risks Extend Beyond the Election
While historical market patterns have generally favored equities following midterm elections, Clifton cautioned that several near-term risks resemble the conditions surrounding the late-2018 market downturn. The combination of potentially tighter Federal Reserve policy, government funding negotiations, and slowing capital investment could create renewed volatility. At the same time, declining oil prices and potential financial deregulation may provide important offsets, underscoring the need to evaluate both risks and supporting economic forces.
Fiscal Pressures Bring Government Spending Into Focus
With federal debt-servicing costs elevated, the discussion examined how fiscal constraints could influence future policy decisions. Proposals involving housing affordability, consumer credit, and expanded tax credits may gain bipartisan interest, but could also raise questions about deficits and government spending. Clifton emphasized that the cost of servicing federal debt, rather than the size of the deficit alone, is becoming an increasingly important consideration for policymakers and investors.
Tax Policy Shifts Toward Wealth and Capital
Although Clifton viewed significant near-term tax increases as unlikely, he highlighted a growing political focus on taxing wealth rather than traditional income. Potential proposals include changes to capital gains and dividend taxation, unrealized gains, and estate tax basis rules. While these measures face substantial legislative hurdles, the discussion reinforced the importance of proactive, tax-efficient wealth and estate planning as policymakers begin shaping their agendas ahead of the 2028 presidential election.
Deglobalization Reshapes Economic and Foreign Policy
Clifton described a broader structural shift away from decades of globalization toward greater regionalization, domestic investment, and strategic competition. Efforts to strengthen U.S. manufacturing, energy independence, and critical supply chains could create long-term opportunities, particularly in industrial and infrastructure investment. At the same time, ongoing tensions involving Iran, China, and Russia remain important variables for global markets, energy prices, and economic stability.
The 2028 Election Is Already Taking Shape
Looking beyond the midterms, the conversation explored how the election results may reshape leadership and policy priorities within both major political parties. Clifton anticipates a generational transition in presidential leadership, alongside growing competition between moderate and populist factions. These evolving political dynamics could have meaningful implications for future tax, regulatory, and economic policy, making the next presidential election an important consideration for long-term investors.
