A research team at Danske Bank analyzed the political tail risks in the US ahead of the November 3rd midterm elections. As the election campaign heats up, the potential disruptions to financial markets, the US dollar, and US Treasuries caused by various unforeseen political events are being closely watched by institutional investors. Global macro trading firms are assessing the potential cross-asset chain reactions that could be triggered by political turmoil in the US. Early voting has begun in more than 40 US states, and the market still tends to believe that the Democratic Party will gain control of both the House and Senate. This report focuses on analyzing possible actions by Trump, including attempts to remove Federal Reserve Governor Cook, the enactment of fiscal-related resolutions, and the use of emergency powers. It also analyzes how policy uncertainty will be transmitted to asset prices under different scenarios, assessing the differentiated impacts of various political shocks on interest rates, exchange rates, and equity markets. Trump's Actions and Market Risk Scenario With two weeks remaining until the US midterm elections on November 3rd, over 40 states have begun early voting. The large number of voters choosing to cast their ballots by mail or in person has introduced uncertainty into the final vote counting process and result confirmation timeline. Historical experience shows that large-scale mail-in voting often prolongs the counting window, exacerbating short-term market uncertainty. Since October 13th, the expectations of major prediction markets have remained largely unchanged. Polymarket still believes that a Democratic victory in both the House and Senate is the most likely outcome, with a probability of 62.5%. However, tail risks have not disappeared, and the market needs to reserve hedging space for low-probability, high-impact political black swan events, and cannot simply anchor to the baseline scenario while ignoring extreme scenarios in its pricing. Under pressure, Trump may try to impeach Cook before the new Senate takes office in early January. Even if he does impeach Cook later, the Democratic-majority Senate can still reject his nomination to the Federal Reserve Board. Changes in the Fed Board directly impact the voting pattern on monetary policy, thus altering market expectations for future interest rate paths. A change in hawkish/dovish officials would immediately repric US Treasury yields and the dollar. However, we expect he will not be able to complete the impeachment process before the new Congress takes office. The entire impeachment process faces legal hurdles and opposition within Congress, making it difficult to implement. A hasty approach could trigger legal battles and litigation. Trump might attempt to directly interfere with the voting process on Election Day. Kalshi's predictions show a 13% probability of Trump declaring a national emergency before Election Day and a 29% probability of declaring it before the end of 2026. However, even if he issues such a declaration, the president has no power to control the election; the election process is managed by the states. The US electoral system is highly decentralized, with each state independently setting its own election rules. A federal emergency declaration alone cannot directly overturn a state's election process; the state secretary is the actual person in charge of election affairs. More radical measures would be invoking the Insurrection Act or declaring martial law. Invoking the Insurrection Act allows for the deployment of troops to polling stations, and Kalshi predicts a 17% probability of this occurring before the end of 2026. Martial law, on the other hand, implies a military government replacing the civilian government, representing a more extreme measure. If such a situation occurs, market risk aversion is likely to surge rapidly, triggering sharp fluctuations in the stock and currency markets, and traditional safe-haven assets like gold and US Treasury bonds will see a short-term influx of buying.