The US election and financial markets three months out

Financial markets have largely taken the dramatic events in the US presidential race over the past month in stride. While the race now appears to be back to a coin toss, the prospect of a second Trump term remains the key uncertainty – a Harris presidency would probably look a lot like the status quo. Our sense is that, in the event of a Trump win, most of his more radical policy proposals would end up being delayed and/or watered down. But even a partial implementation could be enough to disrupt the ongoing fall in Treasury yields and risk undermining the AI exuberance in the US stock market.