There was no obvious victor in the Trump-Harris debate, according to OCBC, which believes that economic performance and the campaign trail will be greater determinants of a US election win.
According to Vasu Menon, managing director, investment strategy at OCBC, the latest US presidential debate between Donald Trump and Kamala Harris is «not going to move the needle».
«No one came out the clear winner. How the economy performs in the coming weeks as seen in the data, especially jobs data, and what they each say at their campaign trail in the run up to November 5, will decide the final outcome,» he said in a note.
«[M]uch depends also on which party wins the elections in the Senate and House of Representatives. The outcome in Congress will also impact the ability of either candidate to carry out the policies they have promised.»
Interest Rate Outlook
Menon highlighted that a Trump victory could cause the Fed to pause rate cuts if it increases inflation expectations due to his policies on tariffs, immigration and tax cuts. Meanwhile, a Harris win will mean «policy continuity, less uncertainty and will probably allow the Fed to cut rates further in 2025».
On markets, Trump’s tax cuts may provide a boost in the short term though inflation could be eventually negative. In contrast, Harris’ tax hikes «may not be welcomed by markets».
«The only certainty at this juncture is that markets are headed for a period of greater volatility in the coming weeks in the run up to the US elections,» Menon added.
