Written by Lizzy Galbraith, Political Economist at abrdn
Having gained enough pledged support from delegates, Harris is all but confirmed to be the Democratic presidential nominee. The focus will now turn to vetting vice presidential candidates and campaigning against Trump.
It is not yet clear how much her candidacy will change the race for the presidency, and we think a Harris presidency would represent policy continuity from Biden. There are constraints on introducing a new policy platform at this stage of the campaign, and, more fundamentally, the broader Democratic party is united around the essentials of what has been called ‘Bidenomics’.
We retain our assessment of a 60% chance of a Trump victory and a 40% chance of a Harris one but we will be watching the polls closely in coming weeks.
We still attach all the probability mass of a Democratic presidential victory to the scenario “Policy Continuity” as we think the implications of a Democratic presidency are reasonably predictable.
There is still significant uncertainty over what exactly a Trump presidency would entail for the economy and markets, and so we continue to split the 60% probability we assign to Trump winning across three scenarios – “Trump trade war 2.0” at 30%, “Full-fat Trump” at 15%, and “Trump delivers for markets” at 15%. Markets seem slightly more inclined to entertain the possibility of Trump’s election being good for risk sentiment and so we have modestly increased our “Trump delivers for markets” scenario from 10% to 15%. We will review these in light of changing polling data and market performance as we get closer to the election.”
| Scenario | Description | Indicative probability |
| Policy Continuity | Democrats retain the White House but likely do not benefit from a unified Congress. Economic policy broadly continues the approach of the first term. | 40% |
| Trump trade war 2.0 | Trump wins the election and focuses on fulfilling campaign pledges on trade and immigration through executive orders. A split Congress curtails legislative efforts, including tax cutting. | 30% |
| Full-fat Trump | Trump takes advantage of a unified Republican Congress to enact his entire political platform – across trade, immigration, fiscal and regulatory policy. | 15% |
| Trump delivers for markets | markets Trump’s agenda largely follows the pattern set in the first half of his first term, with effort focussed on deregulation and tax cuts | 15% |
