US Vice President Kamala Harris and former US president Donald Trump have stepped up their attacks on each other over a number of policies, not the least of which are the presidential candidates’ plans for the world’s largest economy. The economic policies of Harris and Trump, who polls suggest are neck-and-neck in several key swing states, do not deviate much from the core principles of the Democratic and Republican parties. Although they seek to solve similar problems, their approaches — ranging from energy and housing to inflation, trade and taxes — are quite different, as are their views on economic development, meaning the outcome of the Nov. 5 election would significantly affect industry and households.
For example, Harris has been clear that she supports clean energy and favors the reduction of carbon emissions that are the primary driver of climate change, while Trump has campaigned to roll back current environmental regulations and pledged to expand fossil fuel production in the US, although the two share the common goals of lowering energy costs and increasing jobs in the sector.
As for housing, Harris and Trump both consider rising housing prices an urgent issue they must address. However, the Democratic candidate favors using federal programs to expand access to affordable housing and proposes a tax incentive for companies building units for first-time homebuyers. In comparison, the Republican candidate has promised to eliminate certain regulations on the construction of new homes and plans to open up federal land for large-scale housing construction, which he said would help lower construction costs.
Policy changes often amplify fluctuations in the economy, but movements in the stock markets are not always influenced by elections alone. Hence, the possibility of a bull run driven by the election becomes more unpredictable as the candidates’ odds of winning the White House change constantly as the election nears.
For Democrats and Republicans, the issues that get their voter base excited and drive turnout are important in this election, especially as Harris and Trump are locked in tight races in several US states, leading the top candidates to present stark contrasts in their narratives about the country’s political and economic states. Some variables can influence the outcome, such as if anyone makes inappropriate comments on certain sensitive issues, such as gender or race, which could attract negative news coverage and sabotage voter support.
Experience suggests that any bull run driven by an election outcome would be temporary, as investors after the election tend to pause, take a deep breath and wait for concrete evidence of the economy’s direction before returning to the market. Moreover, it takes time for new presidents to implement policy pledges and promises. Certainly, the election outcome would, to some extent, affect the performance of stock prices. However, like many other factors affecting the market, the effect of the election often ends when a new event occurs.
Barring any unexpected shocks, the continued development of artificial intelligence, the performance of corporate earnings and sustained growth in the US economy as the US Federal Reserve cuts interest rates could be more important factors in deciding whether the bull runs on Wall Street would last for a longer term. As the Fed has a track record of consistency in monetary policy and its institutional independence, and because signs show that no more aggressive rate cuts are expected from the US central bank, the results of the US presidential and congressional elections might foretell the direction of US fiscal policy.