US Election Day: Trump, or Clinton, Economic & Political Consequences

Hillary Clinton is the clear favorite in the U.S. presidential election. It is difficult to gainsay the polls. Yet it is perfectly possible that the election will be much closer than predicted and Donald Trump’s chance of winning is considerably higher than portrayed by the media. Ms Clinton is the establishment candidate. Markets expect continuity in policy, personnel and outlook. Her election would not make the U.S. economy more productive or energetic or change the fact that the recovery is weak and seven years on, it moves closer to recession every week. It would not alter the Federal Reserve’s dilemma of how to raise rates in an economy growing less than 2 percent a year. It is, however, what the markets expect. If she wins, the question is more what is the direction of the U.S. and global economies than of any substantial difference from the economic policies of the last eight years. Donald Trump represents change. His policies personnel and temperament once in office are largely unknown. A Trump victory would scramble market positions and uncertainty would likely drive the dollar, equities and bond yields lower. But beyond the immediate reaction many scenarios exist: Trump the establishment slayer; Trump the protectionist; Trump anti-internationalist: Trump the corporate businessman; Trump the political populist. What combination of policies and personnel would emerge from a Trump administration is a hazard but his long and public career may offer some clues. Join us as we take a look at some of the economic and political consequences of the most potentially disruptive election in a generation and venture a few guesses on the market reaction.