Source: ITR Economics – November 2024
The results of the 2024 US presidential election will not change ITR Economics’ macroeconomic forecast, as we follow policies over politics.
We have been asked multiple times recently if our macroeconomic forecast is going to change now that the November 2024 election is over. The answer is no. We will not be changing our macroeconomic outlook at this time.
We have been straightforward for many years that the winner of the White House, red or blue, does not trigger a forecast change for the US economy. We have researched the effects of elections on the economy multiple times throughout ITR’s history and have repeatedly found that the candidate elected to the presidency does not change the business cycle already underway. Essentially, the economy is too large for a singular person to change its course that quickly.
However, this November, we walked away from the election with the Republican Party gaining control of the presidency, the Senate, and the House. We had to ask ourselves if we could still confidently say that the president would not change the economic cycle given an alignment between the president, the Senate, and the House. After analyzing US history in its entirety, we found no conclusive evidence that any alignment of the president, Senate, and House (red or blue) drove greater or inferior economic results. Therefore, we are not changing our macroeconomic outlook at this time.
A few things to keep in mind about why the election does not dictate a change to the macroeconomy:
- This is a process. Legislation will be passed, but change does not happen overnight. It is often one to two years after a piece of legislation is passed before we may see the macro impact.
- The US economy is the largest singular economy in the world. Politics makes for greater headlines, but the business cycle supersedes politics.
- Whether it was Harris or Trump elected (alphabetical order), we anticipated an ongoing rise in the national debt either way. Therefore, the election result has not caused us to change our longer-term outlooks into the 2030s.