IEM Congressional Markets Noted

With Election Day less than a month away, where do the major parties stand in their battle to control the White House and both houses of Congress? One way of tracking the potential outcomes: The Iowa Electronic Markets, real-money futures markets maintained by the University of Iowa Tippie College of Business, which provide probability estimates for events such as elections. The current Iowa futures are consistent with our forecasts for the outcome of the congressional contest. The futures contracts suggest around a 73 percent chance of the GOP maintaining control of both houses. Indeed, the market is priced for either a GOP pickup in House seats or for no change in composition. The odds for the Senate aren't quite as strong, with around a 53 percent chance of a Republican pickup, and the chance of the GOP either holding or losing seats each at 20 percent to 27 percent In the Presidential contest, the chances of a Bush win have narrowed since the first debate.

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