US election. Implications for financial markets and global economy
In our latest Credit Suisse podcast, Brian Blackstone speaks with the bank's chief economist James Sweeney about the implications of the US elections for financial markets, fiscal stimulus and international economic policy.
Former Vice President Joe Biden has been building toward an Electoral College majority, but results are not yet final as vote counting continues. Democrats appear on track to maintain their House of Representatives majority while Republicans appear well positioned to keep a Senate majority, although some key races remain unresolved.
Here are some of Sweeney's thoughts.
"The market has taken the view that this is a split decision. What that means is that the Green infrastructure plan that Biden was pushing very hard is very unlikely to pass, and even the tax hikes that Biden has promised for corporations and high-earning individuals is not going to happen either. I think the market reaction is mainly about those tax hikes not happening."
"A 1.5 to 2 trillion dollar stimulus in the next month or two no longer appears very likely after the election. The politics are complicated. The interests of Americans lie with getting something done. And because the pandemic is worsening perhaps that makes it more likely, but it is not a sure thing at this point."
Trade policy and foreign relations
"I expect a tough approach on trade and China, but very different tactics and perhaps somewhat lower tariffs. On foreign policy, I'd expect Biden to rebuild US alliances and to focus on multilateral negotiations and basically getting the world to work together a little more on certain issues."