I don't care who you vote for, as I've said many times. I care that you vote, and I think anyone who spends this much time thinking about markets, investing and financial freedom should probably pay attention to the people making decisions that affect all three.
We spend all year talking about inflation, interest rates, Treasury yields, oil, tariffs, taxes, regulation and government spending. None of those things exists in a vacuum. Congress and the president have a direct hand in many of them, and the last two years have made that especially obvious. It’s exhausting, I know.
However, this is the only way to make it simpler.
This year's midterms are particularly important in battleground states and competitive congressional districts because control of Congress is close. Democrats need only a small number of additional seats to change control of either chamber, which would materially change the relationship between Congress and the White House during the second half of the president's term.
That has economic consequences. Congress writes tax law, controls federal spending, approves funding for military operations and can change the laws that give presidents authority over trade. The president controls the executive branch, directs foreign policy, appoints regulators and nominates members of the Federal Reserve Board, subject to Senate confirmation.
We have already spent much of the last two years trading around the effects of those decisions. Remember the 2025 spring volatility? How about the 2026 summer chop? Those are not normal market conditions and they are a direct result of a variety of things that I will discuss here.
Tariffs are probably the easiest example. The administration argues that tariffs can protect American industries, strengthen domestic manufacturing, reduce dependence on foreign supply chains and create leverage in trade negotiations. There is a legitimate economic argument behind that, particularly when it comes to industries that the government considers strategically important.
There is also a cost to using them. The Yale Budget Lab estimates that the current tariff regime will eventually raise consumer prices by roughly 0.7% and cost the average household around $1,100 per year. Federal Reserve research has also found that tariffs have pushed retail prices higher, although the amount varies depending on the product and industry.
Those are the kinds of tradeoffs I would look at when evaluating candidates. If somebody supports the tariffs, I would look at whether the manufacturing investment and negotiating leverage they promised actually materialized. If somebody wants to remove them, I would look at what they expect to replace them with and what that means for American manufacturing, trade relationships and consumer prices.
The same applies to Iran.
The administration has defended the military campaign as necessary to address Iran's nuclear program and broader security threats in the region. At the same time, the conflict has disrupted one of the world's most important energy corridors. Roughly 25% of global maritime oil trade and 19% of LNG trade passed through the Strait of Hormuz in 2025.
That has economic consequences well beyond the Middle East. Higher crude prices can raise gasoline and transportation costs, contribute to inflation and affect expectations for interest rates. CFR noted that gasoline accounted for more than half of September's monthly increase in CPI, which is a pretty direct example of foreign policy reaching American households.
It also reaches the market. If energy prices remain elevated and inflation becomes more persistent, Treasury yields can move higher and put additional pressure on rate-sensitive areas such as $QQQ. If energy prices fall and some of that inflation pressure eases, the same relationship can work in the opposite direction.
Congress matters here because it controls funding. A different congressional majority can change how much money is available for military operations, impose conditions on that funding or use legislation and oversight to pressure the administration in a different direction.
Some voters will place more weight on national security, deterrence and preventing Iran from developing a nuclear weapon. Others will put more weight on the economic cost of a prolonged conflict, higher energy prices and the risk of getting pulled deeper into another war.
That is why I keep coming back to the track record. I care less about what is said than what is actually done.
If someone has already been in office for the last two years, you don’t have to guess what they believe. You can look at how they voted, what they funded, what they opposed and what happened while those policies were in place. The same applies to challengers. Look at what they are proposing and whether the numbers behind those proposals make sense to you.
I would do that regardless of party. Republicans disagree with other Republicans on tariffs, spending and foreign intervention. Democrats disagree with other Democrats on trade, regulation, energy and taxes. The letter next to someone's name tells you something, but their record usually tells you more.
Taxes and spending deserve the same attention because they eventually find their way into markets too. Corporate tax policy affects earnings. Government borrowing affects Treasury supply. Healthcare legislation can change the economics of insurers and drug companies. Banking rules affect financials. Energy policy affects oil producers, utilities and renewables. AI regulation and infrastructure policy now touch some of the largest companies in $SPY and $QQQ.
Even the Fed has a connection to elections. The president nominates members of the Federal Reserve Board and the Senate confirms them. Those officials then serve long terms and make monetary-policy decisions independently, but the people sitting around that table did not simply appear there. Elections help determine who gets to appoint and confirm them.
Considering how much time we have spent talking about rates over the last few years, I think that connection is worth remembering.
The local ballot matters too, even if it will never move $SPY. State and local governments affect property taxes, income taxes, insurance rules, utilities, zoning, housing supply, sales taxes, business permits and plenty of other expenses that show up in normal life.
A city council decision on zoning can affect how much housing gets built. A state legislature can change insurance rules or income taxes. A local utility policy can raise or lower what households pay every month. Those decisions rarely get the same attention as Washington, but they can have a very direct effect on everyday finances.
That is where I think voting fits into the larger conversation about financial freedom. We spend a lot of time trying to make better decisions with the money we control. Elections are one of the few opportunities to have some influence over the people making decisions around taxes, spending, trade, energy, regulation and other policies that affect how far that money goes.
The last two years have given us plenty to evaluate. Tariffs have affected imported goods and the companies that rely on them. The war with Iran has affected oil and gasoline prices. Deficits and Treasury issuance have remained part of the discussion around long-term yields. Energy and AI policy increasingly intersect with data centers, electricity demand and some of the largest companies in the index.
Those are already part of our market conversation, so I do not see voting as separate from it.
If you live in a battleground state, the stakes are obviously a little higher because a handful of races can determine control of Congress. Look at what the candidates have done over the last two years, look at what they say they will do next, and decide which direction makes the most sense to you.
As always, trade smart. - SP