Harris with a Democratic Senate and House
Blue sweep
Blue sweep
A Democratic sweep would likely be the most negative outcome for equity markets, primarily due to a higher probability of higher corporate tax rates. The expiration of some 2017 personal tax cuts could also be a small drag on consumer spending. Regulatory scrutiny could increase in some areas, but this would represent an extension of existing policy. The impact would be limited by recent Supreme Court decisions.
Republican Senate and Democratic House
Harris with split Congress
Harris with split Congress
If Harris wins but Congress is split, we would expect much more limited policy changes, and therefore a more muted impact on financial markets. A Harris administration would be obliged to rely on executive action and regulatory oversight to a significant degree, but recent Supreme Court decisions will likely curtail the ability of executive branch agencies to interpret federal statutes.
Trump with a Republican Senate and House
Red sweep
Red sweep
An extension of the 2017 tax cuts would be likely with a possible further reduction in corporate tax rates. Funding for these initiatives might come from a reduction in support for green energy provisions of the Inflation Reduction Act. Equity markets would likely cheer lower taxes and lighter regulation, but this could be partially offset by concerns about the costs and inflation impacts of higher tariffs and trade wars. Interest rates and the dollar would likely rise initially. Financials stand out as key potential beneficiaries in this scenario due to lighter regulation.
Republican Senate and Democratic House
Trump with split Congress
Trump with split Congress
With major fiscal policy changes blocked by a split Congress, higher tariffs and lighter regulation would likely be the hallmarks of this election outcome. Overall, these two forces would have a mixed impact on equity markets. The dollar and interest rates would likely rise modestly. Financials would likely be key beneficiaries of lighter regulation.
UBS Road to the Election
In this series, we sit down with research analysts and political experts to examine key election topics. Tune in for new episodes on Thursdays at 4:30 p.m. ET.
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Speechwriting for presidents
Terry Szuplat, author and former speechwriter for President Barack Obama, shares his best writing tips to reassure people in moments of fear, incorporate data, and more. He also explores how Harris, Trump, Walz, and Vance can use the spoken word to connect with voters.
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Spotlight on the Fed
Could politics affect monetary policy? Rich Clarida, Global Economic Advisor at PIMCO and former Vice Chair of the Federal Reserve, discusses how the upcoming election may (or may not) play into the Fed’s thinking.