Admin October 28, 2024
Christophe Barraud, with a strong track record of forecasting and known as the world’s most accurate economist, is turning his attention to the upcoming 2024 election and its potential economic impact. He anticipates that growth will pick up once the election results are in, as companies shake off uncertainty and start making decisions again.
But while he’s positive about GDP numbers surpassing expectations, he also warns of potential pitfalls, especially if Trump’s tax cuts lead to ballooning deficits. With a history of nailing forecasts, he now faces the most asked question: will it be Trump or Harris in the White House?
Christophe Barraud predicts who will win US 2024 elections
The Bloomberg favourite, chief economist and strategist at Market Securities Monaco, the top U.S. forecaster presented three scenarios to Business Insider that might take place after the presidential win.
In the first scenario, if Vice President Kamala Harris wins but Congress is split, there won’t be much change for the economy. Things are likely to stay the same. Since Harris is currently serving as Vice President in Joe Biden’s administration with her talks largely focused on strengthening the ongoing policies, the claim made just fits right into the situation.
In the second scenario, if former President Donald Trump wins but Congress is divided, he won’t be able to easily cut taxes for businesses and individuals. In that case, chances are high he will turn his focus to foreign policy, leading to quicker trade restrictions and tariffs, which could harm global growth. In the short term, this situation would keep the U.S. GDP stable, but it could hurt the economy long-term as other countries respond, according to the BI report.
The third scenario predicts a Trump win with a Republican majority, which is seen as the most likely outcome. If this goes down, Trump might cut taxes for people and companies and pay more attention to issues happening in the U.S. Right now, this could help the U.S. economy grow faster, maybe by 2.1% to 2.3% in 2025, he suggested.
What is the ballooning US deficit?
During the talk, Barraud shared insights from his high-profile tech clients, including large banks and hedge funds, regarding their concerns over the growing U.S. deficit, especially if Trump is elected and implements tax cuts. Currently, major corporations have held back on their big decisions due to uncertainty about who will win the razor-thin margin election which can sway in any direction and is affecting economic growth.
While he claimed that the GDP will make a strong comeback, he also addressed worries about what could happen if Trump is elected and enacts tax cuts. These cuts could lead to a decline in government revenue, raising questions about how high the deficit might rise and what it could mean for the 10-year Treasury yield.
Barraud thinks that if Trump wins, the 10-year Treasury bond might go up to at least 4.5%, which is up from where it’s at right now, 4.23%. If Trump doesn’t get enough support in Congress, the bond could go up a bit more to 4.35%. But, if Republicans do really well, the bond could go all the way up to 5%. This increase would happen because investors might seek more money back to make up for the higher risks, especially if Trump makes stricter immigration rules in a good job market, which could cause more inflation.
