Zandi Sees Little Policy Shift After Democratic Win

Moody's Analytics expects limited change in U.S. economic policy following Democrats' November 2026 congressional victories.

Updated on Nov. 6, 2026 in Economic Indicators

Zandi Sees Little Policy Shift After Democratic Win

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Moody's Analytics chief economist Mark Zandi expects little change in U.S. economic policy after Democrats won both chambers of Congress in the November 2026 election. Third-quarter GDP grew at a 3.4% annualized rate, while September consumer prices rose 3.7% year over year.

Why it matters

Zandi expects the Iran war, tariffs and trade measures, and immigration restrictions to persist, weighing on growth and adding pressure to inflation and interest rates. Those policies rely on executive action, which limits how much a shift in congressional control can change the economic picture for the United States.

Third-quarter GDP grew at a 3.4% annualized rate and consumer spending rose 3.8%, while the consumer price index climbed 3.7% year over year in September. Inflation-adjusted average hourly earnings fell 0.7% over the same period, and how debt-limit talks will unfold has not been determined.

The players

Mark Zandi

Chief economist at Moody's Analytics, a prominent forecaster who has long tracked U.S. fiscal and monetary policy.

Joseph Brusuelas

Chief economist at RSM, a consulting and accounting firm, known for forecasts on U.S. growth and recession risk.

Gary Cohn

Former director of the White House National Economic Council who has advocated for trade policy positions in Washington.

The details

Zandi said the executive-driven policies on the Iran war, tariffs and trade, and immigration are likely to continue. RSM chief economist Joseph Brusuelas expects the expansion to continue at about 2.5%, above trend, and sees a 15% chance of recession over the next 12 months.

September 2026: Consumer prices rose 3.7% year over year while real wages fell 0.7%.
Third quarter 2026: GDP grew at a 3.4% annualized rate.
November 2026: Democrats won both chambers of Congress.

Macro View

Because the Iran war, tariffs and trade measures, and immigration restrictions rely on executive action rather than statute, a shift in congressional control does not directly alter them. Zandi's expectation of persistent pressure on growth and inflation mirrors the conditions economists have tracked during periods of heavy reliance on executive authority.

With consumer prices up 3.7% year over year and inflation-adjusted hourly earnings down 0.7%, household budgets are being squeezed by rising costs. Economists expect persistent tariff and immigration policies to keep pressure on inflation and interest rates.

The takeaway

Watch the monthly inflation and wage data, since a 0.7% drop in real hourly earnings directly affects what households can afford. Executive-driven policy can keep economic pressures in place regardless of which party controls Congress.