but this outcome is unlikely to significantly limit President Donald Trump's policy agenda, according to Paul Ashworth, chief North American economist at Capital Economics.

Ashworth argues that Trump has relied primarily on executive orders rather than congressional legislation to advance his priorities on immigration, trade, and foreign policy. As a result, even if Democrats gain control of the House, it "will do little to slow or reverse Trump's agenda," given that most key initiatives were independent of Congress.

While a Democratic-controlled House could launch investigations or initiate impeachment proceedings, Ashworth notes that without control of the Senate, there is no realistic prospect of a conviction.

Republicans currently hold a slim majority in the House of Representatives, 218-213. With the president's approval rating weakening since his return to the White House, betting markets are pricing in a nearly 80% chance that Democrats will recapture control in November.

All 435 seats will be contested on November 3, while several special elections in the coming months are expected to provide an early indication of the extent of any shift in voter sentiment.

As for the Senate, with 35 seats up for reelection, including two special elections, Ashworth says Democrats are unlikely to gain control of the upper chamber. Republicans currently hold a 53-47 majority, and only a few contested seats are considered competitive.

"If there's a 50-50 tie, Vice President Vance is the tiebreaker, so Democrats need to win four seats for a majority," Ashworth writes. Betting markets put the probability of Democrats flipping the Senate at about 35%.

Ashworth adds that even in the unlikely event that Democrats gain control of both chambers, structural barriers will still limit their ability to block the president. Democrats will still lack the 60 seats needed to overcome a filibuster, as well as a two-thirds majority in both chambers to override a presidential veto.

In this context, Trump will still have "complete freedom to implement his immigration, trade, and foreign policies," Ashworth says.

"The House could conduct investigations and re-initiate impeachment proceedings against the president, but without a Senate majority, there would be no prospect of a conviction," he adds.

The economist also looks ahead to the election period, suggesting that political pressure could intensify as Republicans seek to avoid losing control of Congress. While late-stage fiscal stimulus is often used to bolster electoral support, Ashworth is skeptical.

The budget deficit is already close to 6% of GDP and could rise to 7% if the IEEPA-related tariffs are deemed illegal and the Treasury is forced to return more than $100 billion already collected. Under these circumstances, he doubts Republican deficit hawks will support another round of stimulus checks.

Finally, Ashworth notes more unconventional risks surrounding the election process itself. He raises the possibility that Trump could attempt to interfere with or challenge the election, citing claims of "fraud" by Democrats or civil unrest related to immigration enforcement.

While he doesn't expect constitutional safeguards surrounding the election to be overridden, he warns that such actions could be viewed poorly by financial markets. Even after the vote, Ashworth predicts that Trump could challenge the result during the transition period if Republicans lose seats, as the next Congress isn't scheduled to convene until January 2027.