What a Biden Victory Could Mean For Investors: Global Fixed Income Team Views
Elections have consequences, as former US President Barack Obama once said, and the election of 2020 will be no different. On a range of issues—taxes, healthcare, energy—President Donald Trump and former Vice President Joe Biden have very different plans, many of which would have an impact on the economy and markets.
In this analysis we will focus on the potential consequences of a Biden victory. That isn’t based on any forecast of the likely outcome. Rather, it reflects the fact that President Trump is a known quantity. He favors low taxes, deregulation, takes a tough line on China and trade and supports more oil and gas drilling. If he wins we can expect more of the same. Biden, should he win, would try to move policy in a different direction, so we will concentrate on analyzing his positions.
That said, there are two things investors should keep in mind:
- Campaign promises don’t automatically translate to actual government programs. In some areas, healthcare for example, where the forces defending the status quo are particularly strong, change may come at a slower, more gradual pace.
- In the short run, perceptions and headlines can move markets, even if policies don’t change much.