Forget Robert Mueller and Stormy Daniels. Ignore Russia. If the election were held today, Donald Trump would win – and if America’s economy remains robust he may well win again in 2020, according to Wall Street.
According to Politico, a basket of Wall Street’s finest eggheads have concluded that economics is the final arbiter of election victories and, if current trends continue, odds are Trump will romp home in 2020.
“The economy is just so damn strong right now and by all historic precedent the incumbent should run away with it,” Donald Luskin, chief investment officer of TrendMacrolytics, told Politico. “I just don’t see how the blue wall could resist all that.”
TrendMacrolytics correctly predicted Trump’s 2016 win when most opinion polls did not.
The US unemployment rate is currently close to 4%, and the country has added jobs every month for a record 101 months in a row. Wage growth, which has lagged behind jobs growth since the recession, is finally, if slowly, picking up.
US gross domestic product – the widest measure of economic health – is now about 3.4%, up from 1.8% in the first quarter of Trump’s presidency. Trump says he’s truly Making America Great Again.
There are – of course – problems. The White House is predicting the US economy will grow at a rate of 3% or more in each of the coming five years. But most mainstream economists disagree, and the Federal Reserve has stopped raising rates – indicating it believes a slowdown is coming.
And then there is Trump’s popularity problem. Some Wall Street forecasts, in focusing on the economy, ignore political polling, but others, including Moody’s Analytics, believe polls do matter. Trump remains highly favored by Republicans but his numbers with Democrats and independents are appalling and could soon get worse, thanks to Mueller.
Republicans also suffered a major defeat in the midterm elections despite a strong economy. But midterms are often seen as a protest vote. When it comes to the general election – if the economy continues on its current course – the Yale economist Ray Fair, Moody’s chief economist, Mark Zandi, and Luskin all believe Trump would win. Unless he is in prison.