Market Comment - US midterm elections: no threat to growth

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After the hard-fought US presidential election in 2016, the midterm elections are seen as a bellwether of the nation’s mood and its satisfaction with Donald Trump. The outcome will likely affect the prospects for Trump’s legislative agenda, but US economic growth is expected to be solid no matter who controls Congress.

The US midterms are on 6 November. They are seen as a referendum on President Donald Trump and the Republican party’s dominance in Washington. By the next day, we will likely know whether the Republicans have retained their hold on the US Congress.

The outcome is far from certain. President Trump’s approval ratings are low, a special counsel investigation into Russian interference in US elections has been underway for well over a year and the US political climate is increasingly polarised. Trump has also been widely criticised regarding what are seen as foreign policy missteps, his lack of interest in protecting the environment and his ‘America First’ rhetoric. Nonetheless, he and the Republican party can claim major successes in the areas of tax reform, the Supreme Court and trade – although the tariff fight with China continues.

In his first term, the US president is benefiting from a strong economy, low unemployment and low interest rates. Trump’s company-friendly regulations and fiscal stimulus have also extended an extraordinary bull market in US stocks. Love Trump or hate him – the growth outlook for the US is solid and he is taking credit for it.

  • Download our US Midterm Elections Special below

Richard de Groot
Global Head Investment Centre
ABN AMRO Private Banking

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