Democrats won control of the US Senate after Jon Ossoff joined his Georgia colleague Raphael Warnock in beating Republican incumbents in run-off elections, giving incoming president Joe Biden control of both houses of Congress.
Mr Ossoff, who at 33 becomes the youngest person to become a senator in four decades, was declared the victor over one-term Republican David Perdue by the Associated Press on Wednesday afternoon after his lead grew to 25,000 votes as final results were tallied.
The win by Mr Ossoff and Mr Warnock, who becomes the first African-American in Georgia to win a Senate seat, means the chamber will have a 50-50 partisan split, with Kamala Harris, incoming vice-president, having the tiebreaking vote.
According to the Financial Times, the Democratic control will boost Mr Biden’s chances of implementing his agenda when he takes office later this month and has already triggered a bitter round of recriminations among Republicans, who have lost control of the White House, Senate and House of Representatives.
Mr Warnock was declared the victor by the Associated Press in the early hours of Wednesday morning. With 98 per cent of votes counted, he had 50.7 per cent of the vote with a lead of nearly 65,000 over Republican incumbent Kelly Loeffler.
At the time the AP called the race for Mr Ossoff, he had secured 50.3 per cent of the vote over Mr Perdue.
US stocks closed 0.6 per cent higher and Treasury yields rose on the prospect of a bigger fiscal stimulus that could feed through to inflation.
Reverend Raphael Warnock and Jon Ossoff ran and won on the values of advancing equality and opportunity for working people across the state and the nation
Nancy Pelosi, House speaker
US 10-year Treasury yields hit 1 per cent for the first time in more than nine months, rising 0.06 percentage points to 1.02 per cent in early Asian trading, and was at 1.04 per cent at the end of the New York trading day. Yields rise when bond prices fall.
The two run-off elections were triggered after no candidate earned more than 50 per cent of the vote in the November 3 general election, and took place in the shadow of Mr Trump’s repeated refusal to accept his loss to Mr Biden.
“It is with humility that I thank the people of Georgia for electing me to serve you in the United States Senate,” Mr Ossoff said in a video posted ahead of the AP declaration. “Thank you for the confidence and trust that you have placed in me.”
Mr Warnock thanked his supporters in a speech delivered over video-link early on Wednesday. “We were told that we couldn’t win this election. But tonight we proved that with hope, hard work and the people by our side, anything is possible,” he said.
“I am going to the Senate to work for all of Georgia,” he added.
Mr Warnock, the senior pastor of Martin Luther King Jr’s Ebenezer Baptist Church in Atlanta, will become only the 11th black senator in US history. In his video speech, he thanked his 82-year-old mother, who grew up picking cotton in the southern US state.
Ms Loeffler refused to concede and said optimistic than I ever have been that we can deliver both,” he said in a statement.
On Capitol Hill, Democratic leaders were celebrating their wins and ramped up planning for legislative action in co-ordination with Mr Biden.
“Reverend Raphael Warnock and Jon Ossoff ran and won on the values of advancing equality and opportunity for working people across the state and the nation,” Nancy Pelosi, the House speaker, said in a statement. “In sending these two outstanding Democratic senators to Washington, Georgians cast their ballots for a fairer, accountable and more compassionate America.”
Aneta Markowska of Jefferies wrote in a note that she assumed $1tn in new stimulus over the next few months, adding “roughly two percentage points to growth over the next two years”. This meant that the economy would reach full employment earlier than expected, prompting the Federal Reserve to tighten monetary policy in early 2023 rather than 2024.
Republicans were considered the favourites heading into Tuesday’s run-offs, given that the party had dominated the political landscape in Georgia for decades. But Democrats were optimistic after Mr Biden’s narrow victory in the state’s presidential contest in November.
Returns on Tuesday indicated Mr Warnock and Mr Ossoff had reassembled the coalition that helped catapult Mr Biden to the White House, enjoying particularly strong support from black voters while also winning over some white suburbanites. In many Georgia counties, the Democratic Senate candidates outperformed Mr Biden’s November numbers.
It remained unclear how the Senate run-offs were affected by Mr Trump’s repeated attempts to undermine the result of the state’s presidential election, although data suggested turnout had fallen short of Republicans’ expectations in rural party strongholds.
“In a normal election cycle, without a president going psycho . . . I think the GOP would have significant advantages here. But that’s not the election we’re in,” Bill Crane, a political analyst in Atlanta, said ahead of Tuesday’s vote.