There is now less than one week left before the presidential and congressional election on 6 November. The situation has moved from a clear lead for Obama to a close race between the two presidential candidates over the past two months.
We expect the knee-jerk reaction in financial markets to be positive (risk on) if Romney wins and muted if Obama is re-elected. Focus will quickly shift to the negotiations about the fiscal cliff as Congress convenes again in the lame duck session.
The discussions will be intense and we are likely to get very close to the December deadline before a compromise is found. This implies that political uncertainty will be a negative for markets and the economy for the rest of 2012.
Next year's challenge will be to find a compromise on reforms that will secure sustainability of the long-term debt outlook. We are not optimistic about a major political deal and expect rating agencies to downgrade the US once again in 2013.
To Read the Entire Report Please Click on the pdf File Below.
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Research US: Election Update - Political Uncertainty To Continue
Published 11/01/2012, 02:00 AM
Updated 05/14/2017, 06:45 AM
Research US: Election Update - Political Uncertainty To Continue
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