Approaching the US Election amid First Presidential Debate
The first presidential debate between President Trump and Vice President Harris took place yesterday, with the election now less than eight weeks away. This prompts a review of the candidates’ policies, particularly their economic strategies.
Overview of Candidates’ Economic Policies
Presented below is a summary of each candidate’s economic policies. For a more comprehensive summary of their social policies and other positions, refer to the Wall Street Journal.
Economic Impact on Federal Deficits
Assessing these policies raises significant questions regarding their economic and market costs. Recent analyses from the University of Pennsylvania suggest substantial impacts on the deficit.
- Harris’ policies are expected to increase the deficit by $1.2 trillion over the next ten years.
- Trump’s policies are projected to increase the deficit by nearly $6 trillion over the same period. This figure does not account for potential tariff revenues, which could increase net revenues by about $2.8 trillion, reducing the additional deficit impact to $3 trillion.
Debate Outcome and Polls
Initial flash polls indicate that the majority viewed Harris as the winner of the debate, with 63% favoring Harris compared to 37% for Trump. Election odds on PredictIt shifted from an even split pre-debate to a 57-47 advantage for Harris.
Importance of Swing States
The focus remains on swing states, where current data shows Harris holding a narrow lead in five out of seven key states. It will take several days for comprehensive polls to determine the debate’s true impact on voter sentiment.
Legislative Implications
The implementation of the candidates’ policies depends significantly on the broader election outcomes. A sweep by either party would be necessary for full enactment, whereas a divided government would likely lead to these policies being diluted or not enacted at all, subsequently lessening their impact on the deficit.
Anticipated Market Uncertainty
Market uncertainty is expected over the next two months as the election approaches, typically restraining market rallies. Historically, markets tend to recover post-election once future policies become clearer.
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