The US election is effectively a toss-up. Harris leads in the polls, but Trump has advantages in the Electoral College, higher approval on the economy and polling errors in his favour. Our election scenarios show a 50% chance of either candidate winning. 

Harris has set out a more fiscally expansive policy platform than Biden, promising a package of tax credits. But she is also proposing higher corporation tax, and increased regulation on certain business practices. 

However, Harris would struggle to implement much of this agenda unless she got a unified Congress. But we think this is unlikely and give it just a 10% probability. 

Still, a Harris government with a divided Congress, which we see as a 40% probability, may be able to pass watered-down aspects of her agenda. Republican interest in child tax credit and immigration reform makes bipartisan agreement possible. 

We continue to think there are multiple potential versions of a Trump presidency, depending on the congressional outcome and his governing style. Crucially though, much of Trump’s trade agenda can be passed with executive orders. 

We assign a 25% probability to trade war, 15% to a market-friendly outcome involving tax cuts and deregulation, and a 10% probability to a potentially volatile scenario involving tax cuts, deregulation, protectionism, and the overt politicisation of monetary policy.

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