US Election
Betting markets give Democrats a 90%-plus chance of flipping the House, but history suggests a midterm flip is business as usual, not a signal for 2028. Volatility measures suggest little of the typical election risk is priced at the index level, but stock-level volatility is elevated, particularly in politically sensitive sectors, and politically exposed stocks are underperforming. Index protection looks inexpensive.
President Trump is raising tariffs again, now through 2027 – and more countries will retaliate this time. While markets can climb over “Liberation Day 2.0,” investors should be wary of today's aggressive policies engendering drastic policy change in 2028.
Left-wing populism will likely prevail within the Democratic Party and inspire large tax hikes in 2029. But the US does not face a socialist takeover.
As part of our new and improved GeoMacro service, please find attached our Global Risk Outlook, a quarterly digest of scenario probabilities and estimated market impacts for all the major geopolitical topics in the world today.
