Forex News

Now isn’t the time for over-confidence in election polls

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Tuesday, November 8 is election day in the United States as Americans cast a vote for all of the House and one-third of the Senate.

Most market-watchers assume Democrats will lose either the House or the Senate. That’s why when Biden floats taxing oil companies on windfall profits, it rings hollow. Lately, the momentum has clearly been towards Republicans in every poll and with only 8 days left in the campaign, a turnaround is nearly impossible.

But what if the polls are (mostly) wrong?

A New York Times/Siena College poll was just released and showed Democrats winning 3 key senate races (PA, AZ and GA) comfortably with a tie in Nevada as well. If they win three of the four, they will hold the Senate, assuming everything else goes as expected.

However these are way out of line with other pollsters. But — notably — the other pollsters don’t exactly have a great track record or are regarded as having a Republican bias.

This is an interesting note from the NYT:

The absence of surveys from reputable pollsters is remarkable. The drought is partly because of rising costs — our October national survey was eight times as expensive as our final polls in 2016, on a per-interview basis. But it’s also because of a crisis of confidence among the traditional pollsters — Times/Siena included — who don’t have a great explanation for the poor results in 2020 and are understandably treading a little lightly.

Pollsters have also been trying to filter through the Trump effect, which loomed large in the last two Presidential elections and the midterms in 2018. He was able to turnout voters who didn’t traditionally show up. Will they be back?

In any case, I don’t have a crystal ball but this latest poll makes me think there’s a wider potential outcome than I’d assumed (and markets are assuming). Here is the pricing on PredictIt.


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