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.
For a more in-depth analysis of how the 2020 presidential elections will impact the municipal environment, read Kozlik’s recent municipal commentaries:
- Oct. 22, 2020: “Clarifying the Magnitude of COVID-19 Related Federal Aid for State and Local Governments”
- Sept. 29, 2020: “Election 2020: Results Will Impact the Economy, Markets, and Municipal Bonds”
Follow Tom Kozlik on Twitter, @tomkozlik, or connect with him on LinkedIn.
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