New Delhi, Oct. 29 -- The upcoming US midterm elections are unlikely to significantly alter the country's long-term interest rate and fiscal deficit outlook, while delayed results could trigger short-term market volatility, according to a report by Morgan Stanley.

With the US midterm elections approaching, the report noted that inflation, economic growth and corporate earnings are likely to remain the key drivers of broader market performance, rather than the election outcome.

On the political outlook, Morgan Stanley expects Democrats to regain control of the US House of Representatives, while revising its Senate outlook from a Republican hold to a toss-up with a slight Democratic edge. It further noted that rising living costs and weak...