Midterm Elections Carry High Stakes for US Economy

Could things get worse?

The midterm slugfest for control of the U.S. Senate could have far-reaching effects on the economy.

Tuesday's elections come just as U.S. growth has been showing consistent improvement, thanks in part to a congressional truce on budget fights. Previous such fights shut down the government and raised the specter of a default on the federal debt. A repeat of either could damage the economic recovery.

If Democrats retain control of the Senate, the cease-fire could hold, analysts say. But it could dissolve with a takeover that gives Republicans control of both chambers and potentially emboldens them to intensify their conflicts with a lame-duck Democratic White House.

Republicans already control the House and are expected to maintain and even expand their majority in that chamber.

Addressing the prospect of a Republican takeover of the Senate, Jack Ablin, chief investment officer at BMO Private Bank, said, "My sense is it will only harden the tension that's in place."