The Trump Landslide
Author: Greg Valliere
July 15, 2024
EVEN BEFORE THIS WEEKEND’S VIOLENCE, Donald Trump had a widening lead in key battleground states, with the prospect of a unified Republican convention. Now his polls are likely to surge, boosted by what will be a rapturous convention with unprecedented unity. A landslide looms, in our opinion.
IT’S POSSIBLE THAT TRUMP could stumble this fall, or that Democrats pick a new, younger, running mate. But it would take something from far out in left field for the Republicans to lose this election. The landslide probably will extend to the House and Senate.
THE PROSPECT OF A REPUBLICAN SWEEP has implications for the financial markets. We anticipate a drive early in 2025 to extend — and expand — the 2017 Trump tax cuts, accompanied by laissez faire, pro-business regulatory policies. Will Washington finally curb the alarming rise of spending? The jury is out on that.
THE EQUITY MARKETS should love this stimulative outlook, although more tax cuts and persistently high deficits could spook the bond market. And the likelihood of higher trade tariffs could worry investors if China and other countries retaliate.
THE BIG RISK, OBVIOUSLY, IS THAT INFLATION could stay stubbornly high, fueled by the tax cuts, which would take effect on Jan. 1, 2026. There’s a long way to go between now and 2026, and much could change. It’s important to note that much of Trump’s proposed legislation would require 60 votes to clear the Senate.
THE FEDERAL RESERVE also could play a major role. After struggling to subdue inflation, it’s highly unlikely that Jerome Powell would embrace a dovish stance that could un-do his hard work. The Trump-Powell feud may resume, with Trump making it clear that he wants Powell out after (or before) his term as chairman expires in 2026.
WHILE TRUMP MAY FACE VOLATILITY in his second term, that’s nothing compared to the Democrats’ grim outlook. With even New York state in play this fall, you know the Democrats are in serious trouble. We think Trump will leave Milwaukee with a 5-to-8 point lead nationwide, with a chance to hit 350 electoral votes; 270 are needed to win.
ONCE TRUMP LEAVES MILWAUKEE, the Democrats will have about a month to figure out who their nominee will be. Joe Biden has shown some signs of life since the assassination attempt, but party insiders — especially the fundraisers — view him as hopeless.
AS FOR TRUMP, his clenched fist and tough guy posture after getting shot is an iconic image that will be remembered for centuries, just as Teddy Roosevelt (in Milwaukee) and Ronald Reagan defiantly recovered from their wounds. This is Trump’s week, at the least — as the prospect of a landslide grows.
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