2024 U.S. Election Buzz

The 2024 U.S. elections promise to be a high-stakes dramedy. The heated on- and offline debates take place against a backdrop of international crises, important domestic political and social problems, rising stock market, assassination attempts, accusations and scandals, emergence of new heroes and exits of old players. The public is watching closely to see who will lead the “Last Empire” during this challenging time when two seemingly very different visions of America collide. Both candidates hold strong and divergent positions on important issues for Americans (with the exception of increased government spending), the solution of which will have a significant impact on the future political direction of the United States.

Odds & Sentiment

At the moment, public opinion is very divided and unpredictable, and polls are often easier to ignore than to follow. Trump has the unwavering support of his “fan base” and is likely to be leading in the polls, as well as in the positioning of traders, investors and bookmakers in recent weeks. His “star power” is undiminished and his team is growing, thanks to Kennedy’s historic flip and Elon Musk’s now-famous Rocky Balboa-style dance. Meanwhile, Kamala Harris has to contend with a difficult domestic political environment. Because of economic problems and how the administration is handling domestic crises, Biden’s approval ratings are low, with 57% of Americans disapproving of the President’s actions. While Harris emphasizes social justice, fighting climate change, and progressive ideas that appeal to the Democratic base, she needs to attract more voters who may be skeptical of the current state of affairs.

As for the bookmakers’ predictions, the current situation is as follows: the probability of Trump winning is estimated at 62%, and that is a serious advantage. His political base remains loyal and his populist messages continue to resonate, especially in swing states. Harris (38% chance of winning) faces an uphill battle, and her fluctuating approval ratings frankly make it worse. However, as the first Afro/Asian American woman to run for president, she may attract even more attention from important demographic groups and the progressive wing of the Democratic Party.

The Big Issues at Play

Economy

Harris has emphasized that strengthening the middle class will be a central priority of her presidency. She will focus on cutting taxes for working- and middle-class Americans and lowering the costs of everyday needs like health care, housing, and groceries. She has emphasized the importance of protecting Social Security by raising corporate tax rate and taxes for highest-earners.

Harris also has addressed such measures as funding public education, mortgage credits and improving Social Security benefits. Harris is in favor of increasing tax benefits for first-time homeowners and families. This strategy, according to economists, might keep the federal deficit more controllable, with expected inflation averaging 2.5% over the following ten years and a $3.5 trillion rise in deficit. 45% of economists believe that her proposals will lead to quicker economic stabilization and further development, while advancing equity and opportunities for Americans with middle-class and lower-class backgrounds.

Trump, on the other hand, has planned a series of tax cuts. He plans to extend the cuts he implemented in 2017, which are due to expire in 2025. The 2017 cut was the biggest tax overhaul in decades, aimed at promoting growth and investment. The largest cuts went to businesses and the wealthy, which Democrats have called to reverse. Now Trump plans to bring tax rates down even more, such as reducing corporate tax rate to 15% from the current 21%.

Ex-president has also stated his plans to impose an across-the-board 10% tariff, 20% tariff on all imported goods and up to 60% or higher on Chinese goods to bring manufacturing jobs back to the U.S. However, his tariff strategy could revive the trade war he triggered during his first term as president. This approach raises concerns that inflation could soar and result in a $7.5 trillion deficit over the next ten years. While many analysts believe that his tax cuts and deregulation could drive economic development, many are concerned that these policies will increase inflation and financial instability.

Financial markets

With Trump in office and a Red Sweep, markets could get a short-term boost. In the long to medium term, fiscal dominance will further increase budget deficits and inflation, possibly prompting the Fed to raise interest rates (remember also Donald Trump’s less than cordial relationships with Jerome Powell), while deregulation could boost business and asset classes such as oil and energy, precious metals and cryptocurrencies. After a possible initial rally, we should expect increased volatility in financial markets and tough times for bond investors, which is already partially starting to happen.

Should Kamala Harris win and the Democrats gain control of the Senate and House of Representatives (which is unlikely), we are likely to see less aggressive fiscal policy and therefore lower potential inflation risks and a “less nervous” Fed, a more stable regulatory environment, although deficits will continue to rise. Stocks and bonds may struggle, and investors should look for ideas in alternative asset classes (including alternative energy).

Russia-Ukraine War

Standing with Biden’s administration, Kamala Harris has been a staunch supporter of Ukraine. The Democrats have made it clear that their support for Ukraine is a means of upholding democracy and resisting dictatorship. Harris has called for continued military aid, sanctions against Russia, and a united NATO front, positioning herself as a global leader in this crisis.

Trump, on the other hand, isn’t hesitant to express his doubts on Ukraine getting endless aid. He has made it clear that he believes Europe should take on more responsibility and that American involvement is a waste of money that would be better used domestically. Trump has repeatedly echoed the message that European states not contributing at least 2% of GDP to military spending, will not get defended by the U.S. in the event of an attack. Trump’s “America First” idea focuses on distancing America from what he terms as “endless foreign entanglements”, appealing to a significant segment of his supporters who are tired of being involved in other countries’ problems.

Israel vs Iran

The positions of the candidates on Israel and Iran are being followed closely as tensions between Iran, Israel, and Hezbollah are rising in the Middle East. Like the majority of Democrats, Harris is dedicated to Israel’s security, but emphasizes the need for de-escalation and negotiation, particularly with Iran. She may not be seeking to negotiate a new nuclear agreement, as Obama did, but her administration would probably aim to reduce tensions by increasing cooperation.

Trump is taking a more hardline approach. He is quick to remind Americans that the United States imposed severe sanctions and withdrew from the Iran Nuclear Deal during his presidency. Claiming to be a defender of Israel, he brags about the Abraham Accords and pledges to use all available means, if not military force, to restrain Iran’s geopolitical ambitions.

Immigration

Immigration is one of the most hotly debated domestic issues, and the difference between Harris and Trump could not be more pronounced. Harris is an advocate of comprehensive immigration reform, and she places a strong emphasis on humanitarian treatment, giving Dreamers a path to citizenship, and enhancing border security with new technology. She regards Trump’s wall as antiquated and dividing and views immigrants as a vital component of America’s future.

Naturally, Trump is adhering to his old and well-rehearsed catchphrase, “Build the Wall” (or extend it). Criticizing the Biden administration for the surge in illegal immigration, he has accused Harris and the Democrats over what he refers to as “border chaos”. Trump’s plan includes deportations, tougher enforcement, and ending funding to immigrant sanctuary cities. His supporters, who view border security the same as national security, are fired-up by his stance.

Natural Disasters

Climate change and disaster response are major future concerns in a year marked by destructive natural disasters in the U.S. Harris strongly supports the Democratic Party’s climate policy, which calls for increased investment in renewable energy, stricter environmental regulations, and the increase in readiness for natural disasters. She advocates taking immediate action against climate change, stating that the current disasters are only the beginning in the absence of significant change.

Trump is refusing to buy into the climate panic. He considers most of the environmental regulations imposed by the Democrats to be and overreach that causes major consequences for U.S. industry and businesses. Trump is pushing for the deregulation and expanded domestic energy production from non-renewable resources (coal, oil, and natural gas), while concentrating on providing immediate disaster relief for citizens and businesses and infrastructure restoration. Although he doesn’t deny the need for cleaner energy, he criticizes “climate alarmists” initiatives.

Current odds reflect how unpredictable these elections are. As domestic issues in America worsen and international tensions rise, people are forced to wonder: Who will lead the country through this storm?