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Macroeconomics

US 2024 presidential election preview: Trump faces new adversary

  • 26 July 2024 (10 min read)
KEY POINTS
President Joe Biden ended his bid for re-election and endorsed Vice President Kamala Harris. The outlook for Harris is more uncertain, but on balance we consider a Trump victory in November the most likely.
Trump would likely focus on tariffs, tax cuts, migration and deregulation. His win would also raise concerns around geopolitics – all of which would mean growth headwinds.
Harris would likely adopt Biden’s blueprint to focus on partial tax cut extensions and deficit reduction with a milder migration clampdown. An opposition-led Senate would likely impede the passage of such an agenda.
The Federal Reserve would likely ease policy less under Trump and may implement a softer regulatory regime.
Trump’s agenda would likely boost the dollar and yields in the short-term, but is ambiguous to risk assets. Further ahead, it suggests a weaker dollar, bonds and risk assets.

Former President Donald Trump had been enjoying a lead in the polls, albeit a small one for many months. However, his lead increased after June’s televised debate raised further concerns about President Joe Biden’s fitness for re-election. After weeks of soul-searching, President Biden announced he would not stand for re-election and endorsed Vice President Kamala Harris. This was no coronation, but with Democrat heavyweights quickly joining in to also endorse Harris, Democrat hopes to avoid a messy selection seem to have been met, with Harris the likely nominee. Polls conducted immediately after have shown Harris doing slightly better than Biden – even leading Trump in one poll. But we are cautious of whether such early polling will persist and on balance consider the likelihood of Trump regaining office as most likely, while acknowledging that Harris’ entry makes this less certain.

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    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
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