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The US elections: digested.

The US is heading to the polls in November 2016. The results will decide the US president, alongside many US senators and members of Congress. J.P. Morgan Asset Management looks at what you need to know.

  • The impact on financial markets is likely to be muted, in spite of the campaign rhetoric
  • We discuss how the US government is set up, and the electoral process for each area
  • We look at how the election results will impact financial markets

While in the months ahead, voters will be subject to a deluge of campaigning from the candidates, we believe the impact of the election on financial markets is likely to be far more muted than the intensity of the campaign rhetoric might suggest.

How is the US government set up?
The US government has three branches, with each branch given overlapping responsibilities to make sure that no single part of the government is too powerful. This means that one branch cannot individually make any changes. The US Congress creates and passes laws, the president signs or vetoes them and the Supreme Court is the ultimate authority on the laws. In this bulletin, we explain how these three branches form the US government.

President
In a presidential system, the entire population votes for their choice of president and the vice president, as well as their local representatives in Congress. This is in contrast to the UK, where we directly vote for individual MPs, with the prime minister emerging as the leader of the most popular party.

“Each branch (is) given overlapping responsibilities to make sure that no single part of the government is too powerful. This means that one branch cannot individually make any changes.”

Congress
Congress is made up of the Senate (or upper house, similar to the House of Lords) and House of Representatives (or lower house, similar to the House of Commons). Both houses operate separately and vote on proposed laws independently of each other.

House of Representatives:
The house has 435 seats, each with a two-year term. Each US state is represented in the House in proportion to its population as measured in the census, but every state is entitled to at least one representative.

Supreme Court
The highest federal court in the US is made up of nine judges nominated by the president and confirmed by the Senate. They are the final interpreters of constitutional law.

For more detail, plus the implications of a victory by either side. See more detail here >

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