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'Biden’s efforts to win votes feels unprecedented': Piper Sandler

Published 05/23/2024, 09:34 AM

US President Joe Biden’s efforts to secure votes for the upcoming election “feel unprecedented,” Piper Sandler analysts said in a Wednesday note, with some actions bordering on illegality and likely to be overturned.

The firm stressed the critical nature of the upcoming 2024 election, highlighting the noteworthy risks posed by both leading candidates, Biden and Trump, to financial markets.

Piper’s analysts believe that legislative activity for the remainder of the year would likely be minimal due to a divided government, internal conflicts among House Republicans, and the impending election.

"Biden’s efforts to win votes feel unprecedented (and it’s sometimes illegal and going to be reversed)," the firm wrote.

“The fiscal impulse is roughly neutral, the deficit is down slightly (but is still very high and interest costs are way up), and massive new regulatory costs (also designed to win votes) are an overlooked headwind to the economy,” it added.

Despite a neutral fiscal impulse and a slight reduction in the deficit, interest costs have surged, adding to the economic headwinds.

Piper’s team believes that the 2024 election's implications are more significant than in recent years, with potential changes to trade policies, geopolitical stability, and fiscal sustainability, as well as “massive potential swings related to taxes, regulation, and immigration.”

In its base case, Piper Sandler predicts a close election. While Trump holds leads in the polls, the race remains narrow on a national level and in the make-or-break Midwestern states of Michigan, Pennsylvania, and Wisconsin.

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