Are you ready to understand how the upcoming presidential election will impact financial markets? With less than 140 days to go until the U.S. presidential election, the policy differences between Donald Trump and Joe Biden are becoming a key focus for investors. At Extreme Investor Network, we are here to break down the potential impacts of the election on monetary, fiscal, trade, immigration, and regulatory policies for you.
Let’s start with monetary policy. Trump’s picks for the Federal Reserve Board and his choice for Jerome Powell show a strong stance on inflation and monetary policy. On the other hand, Biden’s picks may not have the same hawkish outlook. However, the differences in monetary policy calibration or independence under either outcome may not be significant, at least in the early days.
Moving on to fiscal policy, Trump’s record before Covid showed a relatively stable debt/GDP ratio, while Biden’s deficits post-Covid raise concerns. Both candidates may not embrace fiscal parsimony, but the debt and deficit storylines are likely to remain consistent regardless of the election outcome.
When it comes to trade policy, neither candidate seems keen on promoting a free trade agenda. While Trump may be tougher on China, both candidates are likely to maintain or increase protectionist policies, which could lead to more populist political outcomes.
Immigration policy may see significant differences between the two candidates, but the impact on financial markets may not be substantial. The changes in immigration policies may have effects on lower wages and aggregate demand, but it may not directly impact stock indexes, Treasury yields, or the dollar.
Finally, regulatory policy is where the real market impact lies. Trump’s expected focus on deregulation could drive financial markets to new heights, as seen in the NFIB Small Business Optimism survey back in 2016. A Trump win could lead to a positive supply shock in sectors such as energy, healthcare, technology, consumer, and financial, resulting in initial jumps in stocks, rates, and the dollar.
At Extreme Investor Network, we believe that understanding the potential impacts of the presidential election on financial markets is crucial for investors. Stay informed with us as we continue to analyze and provide insights on the ever-changing landscape of investment opportunities. Stay ahead in the game and maximize your investment potential with Extreme Investor Network.