Washington, United States

With a compelling track record of predicting the economy, Christophe Barraud has taken an interest in the upcoming 2024 US presidential elections. The top economist said in an interview that growth is expected to pick up pace after the election results are out. This is because companies will be able to make bigger decisions once they are certain about the changes likely to happen in the economy, leading to an increase in GDP of the country.

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What Christophe Barraud predicts for US 2024 elections

Ranked as number one economist by Bloomberg, Barraud has forecast three possible outcomes of the US elections, according to Business Insider.

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In the first scenario, if Vice President Kamala Harris wins the upcoming elections with a split in Congress, not much will change for the US economy. In this case, Barraud predicts things will remain the same.

In the second scenario, former president Donald Trump wins but Congress is divided, Trump will not be able to easily cut taxes for businesses and households. This will lead him to focus on foreign policies that will likely result in trade restrictions and tariffs being implemented. Outcome of this will not affect the US economy in the short term. However, it may affect the global economy, and may prove harmful for the US in the long run, according to Business Insider.

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Barraud’s third and most likely scenario is predicted to be Trump wins with a Republican majority. In this case, Trump might cut taxes for companies and households and will likely focus more on domestic policies. This may leave a positive impact on the US economy in the short term, with an expected rise of 2.1 to 2.3 per cent in 2025.

However, Barraud highlights a concern that in case Trump is elected and implements tax cuts, it may result in revenue shortfalls. The 10-year Treasury bond may rise to at least 4.5 per cent from the current 4.23 per cent. If Trump doesn’t get a majority in Congress, the bond could increase to 4.35 per cent, while if he wins by majority, the bond may go as high as 5 per cent. This will happen as investors may seek a higher risk premium, especially if Trump toughens the immigration policy in a healthy job market that will result in more inflation.

(With inputs from agencies)