Biden wins election but Republicans hold Senate
After the 2016 presidential race, Donald Trump won with 306 electoral votes against Democratic nominee Hillary Clinton’s 232 votes, in what he called a “landslide” victory.
16th November 2020
President-elect Joseph R Biden is projected to have won the 2020 presidential race by that same margin, but a traditional transfer of power seems unlikely and the coming weeks are only the beginning of legal challenges that will occur alongside mandatory recounts for many states.
Wall Street hates uncertainty and would like to know if President Donald Trump is getting closer to admitting defeat. Trump has been busy on Twitter, with many believing he is nearing to accepting the election outcome. One tweet said, “He won because the election was rigged…,” but shortly after many media outlets suggested this was a sign President Trump was coming to grips with the election vote, he clarified that is not the case. Trump is not done fighting as subsequent Tweets point that out, “He only won in the eyes of the FAKE NEWS MEDIA. I concede NOTHING! We have a long way to go. This was a RIGGED ELECTION!”
Despite Trump’s efforts, Biden is widely expected to become the 46th President of the United States of America, but it will take weeks for him to be certified the winner of the states he won. Wall Street seems content with a Biden administration and a Republican-held Senate. Election Day ended up having the Republicans perform better-than-expected in both the House and Senate races. The Senate will be able to prevent any sweeping tax reform or changes to regulation. Republicans have also signaled that massive spending and infrastructure initiatives will have to be dialed down.
Over the next few weeks, all the states are working on certifying the election results. President Trump is unveiling his legal strategy in what seems to be an unlikely attempt of reversing the election outcome. The states that have recounts can change their deadlines, but it is expected for everything to be wrapped up by the “safe harbor” deadline of December 8. The Electoral Count Act requires states to settle disputes and have a final tally of the votes by that key December date. In 2000, the presidential race came down to a margin of 537 votes. The Supreme Court eventually ended the Florida recount because it was deemed unlikely they would be able to finish the recount by the safe harbor deadline. President Trump may not ever concede, but the Constitution will have him leave office on January 20. Even if the election somehow dragged on, the speaker of the House would become acting President.
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Trump is maintaining his election fraud allegations and has yet to grant President-elect Biden access to intelligence briefings and allow his team to have authorisation to work on the COVID-19 vaccination distribution. These two months are critical for Biden setting up everything. All these roadblocks could delay meaningful action in support of fighting the winter wave of the coronavirus.
President-elect Biden picked Ron Klain to become his chief of staff, who has experience with other administrations and is viewed as a pandemic response veteran. Klain was the top coordinator with the Obama administration’s response to the Ebola health crisis in 2014. He also helped implement the economic recovery plan in 2009. Progressives are also welcoming Biden’s pick as the other favourite candidates were viewed as too moderate and unlikely to support reforms.
As Biden builds his cabinet, it is clear that it will be diverse. Much attention will fall on the selection of the Treasury secretary. President of the Atlanta Fed, Raphael Bostic is at the top of the list and would be the first African-American and openly gay man to run the Treasury. Also, in the running is former-Fed Chair Janet Yellen and Federal Reserve Governor Lael Brainard, both are highly qualified and would be welcomed choices.
The race for Congress is far from over as the Georgia Senate races delivered two run-off votes that will occur on January 5. The Republicans are leading with 50 seats, compared to the Democrats 48 seats going into both races, and likely feel confident they will win at least one of the contests. It seems the motivation to beat Trump might not resonate in having the Democrats win the Senate. Voter turnout is difficult to predict but recent history suggests the Republicans should outperform. The last two Georgia run-off races went Republican, with Republican Paul Coverdell winning a tight contest against Democrat Wyche Fowler in 1992 and Republican Saxby Chambliss’s landslide win against Democrat Jim Martin in 2008.
Senior Market Analyst, The Americas, OANDA
Ed has over two decades of financial market experience and began his career on Wall Street as a forex broker. Ed has worked with some of the top research and news departments in New York and frequently appears on CNBC, Bloomberg TV, Yahoo Finance Live, Fox Business, AusbizTV, and Sky News.
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