Christophe Barraud, a leading economist, predicts US economic growth will likely accelerate post-election, despite various outcomes. His analysis suggests GDP growth could surpass current expectations depending on election scenarios involving Kamala Harris or Donald Trump. Barraud’s detailed methodology leverages economic data and poll-betting markets to derive predictions about potential impacts on Treasury yields and the overall economy.
Christophe Barraud, a highly regarded economist, predicts that post-election, US growth will likely accelerate due to diminished uncertainty. Companies have hesitated on investments and hiring due to the current unpredictable economic climate, but clarity from the election results could stimulate business activities. Barraud suggests that GDP growth might surpass consensus expectations, projecting 2024 growth at 2.7% instead of 2.6% and 2025 growth at 2.1% instead of 1.8%. Barraud outlines three scenarios based on election outcomes. If Vice President Kamala Harris wins with a divided Congress, there may be minimal change, maintaining the status quo. If former President Donald Trump wins but faces a divided Congress, his focus would shift predominantly to foreign policy rather than tax cuts, potentially straining global growth. On the contrary, if Trump receives a Republican sweep, tax cuts could boost domestic growth significantly, creating opportunities for a rise in GDP in 2025. His wealthy clients, including banks and hedge funds, are concerned about the expanding US deficit, especially if Trump implements tax cuts leading to revenue shortages. Barraud anticipates that should Trump win, initial shocks could push the 10-year yield up to 4.5%. Without a majority in Congress, it might settle around 4.35%, but a Republican sweep could elevate it to 5%, as investors demand higher risk premiums. If Harris wins with a divided Congress, however, the yields might decrease since the market is already factoring in a Republican victory. Barraud’s exceptional accuracy stems from his methodical, data-driven approach. He employs a rigorous three-step process, combining economic indicators, backtest signals, and insights from multiple models, including poll-betting markets, to refine his predictions and account for risks.
The article revolves around Christophe Barraud, a notable economist known for his accurate predictions regarding the US economy. With a track record of forecasting that has made him a leading figure since 2012, Baraud focuses on the implications of the upcoming elections on economic growth and changes in the Treasury market. His predictions take into account various election scenarios, Congress power dynamics, and their tangible impacts on economic performance and investment yields.
Barraud’s insights illuminate the complex relationship between political elections and economic outcomes. His projections suggest that clarity from election results could rejuvenate US economic growth, although the nature of the election’s outcome plays a crucial role in financial stability. Regardless of who wins, the evolving landscape of fiscal policy and international trade could create significant ripple effects in the economy and the financial markets.
Original Source: www.businessinsider.com
