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How Will the Upcoming 2020 Presidential Elections Impact Fiscal Policy?


The current pandemic environment could escalate the impact on municipal issuers and investors.

According to HilltopSecurities Head of Municipal Strategy and Credit Tom Kozlik, the upcoming Nov. 3, 2020 presidential elections will have a significant impact on fiscal policy and the government’s COVID-19 relief strategy. In his Sept. 29 commentary, Kozlik warns that the outcome of the 2020 presidential election matters a great deal for investors, the markets, public finance, and municipal bonds.

Why the Outcome of the 2020 Elections Matter
While Kozlik references that many have “traditionally argued that the individual sitting behind the Resolute Desk in the West Wing of the White House has not had as strong of an impact on domestic policy than on foreign policy,” he explains that this year will be different.

“The individual in the White House come January 2021 will have an outsized impact on domestic policy going forward, especially considering the current environment. The impact would be even higher if one of the political parties is able to take the White House and both chambers of Congress. It appears there is the potential for this to occur,” Kozlik said.

The Federal Government’s Fiscal Policy Response to COVID-19
Kozlik stated in his Oct. 22 commentary that the federal government’s fiscal policy response to COVID-19 has already been substantial, citing the $3.6 trillion allotted through four phases of COVID-19 relief in March and April 2020. He believes that the results of the presidential election will dictate how the government chooses to move forward on future relief.

Learn More
For a more in-depth analysis of how the 2020 presidential elections will impact the municipal environment, read Kozlik’s recent municipal commentaries:

Follow Tom Kozlik on Twitter, @tomkozlik, or connect with him on LinkedIn.

The paper/commentary was prepared by Hilltop Securities (HTS). It is intended for informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of HTS as of the date of the document and may differ from the views of other divisions/departments of affiliate Hilltop Securities Inc. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance. This material has not been prepared in accordance with the guidelines or requirements to promote investment research, it is not a research report and is not intended as such. Sources available upon request.

Hilltop Securities Inc. is a registered broker-dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. HTS are wholly owned subsidiaries of Hilltop Holdings, Inc. (NYSE: HTH) located at 1201 Elm Street, Suite 3500, Dallas, Texas 75270, (214) 859-1800, 833-4HILLTOP

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