The United States Presidential Elections are in less than six weeks, and UBS Global Wealth Management has stated that while investors can anticipate policy continuity from Kamala Harris, if she wins, they should also prepare for unpredictability if Republican and former President Donald Trump gets re-elected again.
“Drill, Baby, Drill” was Trump’s pledge when he agreed to accept the Republican nomination in July 2024.
Knowing that increased spending and increased production will affect the price of oil, Themis Themistocleous, head of the bank’s chief investment office for Europe and Africa, said he could encourage the American oil companies to do so.
According to Themistocleous, a stance like this might be detrimental to the Middle East region, especially for nations whose economies rely heavily on gas and oil.
Themistocleous further stated that given Harris’ position on the health and prospects of the American economy, the Federal Reserve would probably keep cutting interest rates through the end of 2024 to boost the economy, which would have a knock-on effect on the region’s dollar-pegged economies.
Conversely, Trump has made inferences that should he win back office, he would try to sway the Fed, which would probably lead to more uncertainty.
Foreign Policy On Middle East
“I think that there’s every reason to assume that the foreign policy of a Harris administration will be similar to what we see now: rules-based, human rights-concerned and focused on allies and focused on minimising civilian casualties, and focusing on a ceasefire,” Mark Haefele, Chief Investment Officer at UBS, said, regarding the two candidates’ foreign policy stances on geopolitical events impacting the Middle East, as reported by Zawya.
On Trump’s foreign policy, he too expects unpredictability.
“I would say, from a market participant perspective, the Trump administration [of 2016–2020] was almost exhausting in its unpredictability, so that element is likely to continue. It is much harder to predict how things will go, and there is a stated element of brinkmanship to the Trump policy,” he added.