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[Policy and Market Implications Following the Midterm Elections] ⑴ Vice President Vance attributed the Republican Party's midterm election loss to the Iran war in a social media post. Brent crude oil futures for the near month fell nearly 7% in the following hour, while the decline in oil prices helped the S&P 500 close 1.6% higher that day. ⑵ Vance's statement may indicate the end of the Iran war. The midterm elections demonstrate a power transition within the government, with the most obvious successor already identified. Even if there are short-term bombing operations, they may only be symbolic, a way to conclude the day after a victory declaration. ⑶ Democratic socialists see themselves as big winners in the midterm elections, which will pull the Democratic Party to the left. Increased political polarization will make any compromises to control fiscal disorder more difficult. The US is firmly moving towards yield curve control. ⑷ Immigration enforcement needs change, but the fundamental challenge lies in whether an administration can retroactively reverse its policy if it effectively opens the borders. This may be the biggest single policy challenge for the US and Europe. (5) Trump's major setbacks have altered the Fed's dynamics. Many who had become hawkish after Walsh took over as chairman have now waned their hawkish stance due to a decreased interest in "confronting Trump," and the currently priced-in 2027 rate hike may not materialize. (6) Brent crude oil's fair value is approximately $90 per barrel, indicating further downside potential. This week's sharp drop serves as a reminder that previous high prices were entirely risk premiums, which can be compressed instantly. (7) The dollar's rise driven by war and soaring oil prices is only a temporary phenomenon. The current equilibrium is still a weakening dollar, which has remained largely flat against emerging market currencies this year but has significantly appreciated against other G10 currencies, leaving considerable downside potential. (8) The decline in oil prices has provided breathing room for the French debt market, where previous sell-offs were linked to soaring oil prices. (9) Vance's statement suggests that "perpetual war" is no longer an option, and the medium-term trajectory of oil prices is trending downwards. This is beneficial for gold and other precious metals, which had previously faced pressure during oil price rallies.